Big news today that could materially effect Ripple's ability to continue its strategy of selling into banks. Ripple has responded with a statement saying "We have not willfully engaged in criminal activity".
According to a 5th May press release by the US regulator, Ripple Labs failed to register as a money services business (MSB) with FinCEN prior to selling XRP, a digital token used to settle payments on the Ripple network. Additionally, the company is said to have failed to implement appropriate anti-money laundering (AML) procedures concurrent with its responsibilities as an MSB. Similarly, its subsidiary, XRP II, is said to have acted unlawfully as an MSB without an effective AML program, failing to report “several” transactions said to be suspicious in nature. The bulk of the violations against both companies appear to have taken place between 2013 and early 2014, according to a more detailed addendum to the release.