PayGunner is committed to operating within the full scope of federal and state regulations governing money transmission, payment processing, and financial services. This page outlines our compliance framework and regulatory obligations.
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FinCEN Registered Money Services Business
Registered with the Financial Crimes Enforcement Network in compliance with 31 U.S.C. § 5330
1. Federal Regulatory Compliance
Bank Secrecy Act (BSA) - 31 U.S.C. § 5311 et seq.
Requirement: Money Services Businesses must implement AML programs, maintain records, and file reports to combat money laundering and terrorist financing.
Our Compliance:
- Comprehensive AML/KYC program (see AML Policy)
- Customer identification and verification procedures
- Transaction monitoring systems
- Suspicious Activity Report (SAR) filing procedures
- 5-year record retention
USA PATRIOT Act - Sections 326 & 352
Requirement: Enhanced customer identification and verification procedures, including Customer Identification Program (CIP).
Our Compliance:
- Government-issued ID verification required for all accounts
- SSN verification and tax reporting
- Physical address verification
- Enhanced due diligence for high-risk customers
Office of Foreign Assets Control (OFAC) - 31 CFR Chapter V
Requirement: Screen customers and transactions against SDN list and sanctioned jurisdictions.
Our Compliance:
- Real-time OFAC screening at account registration
- Monthly re-screening of all active accounts
- Transaction screening against sanctioned entities
- Asset blocking procedures for positive matches
Electronic Fund Transfer Act (EFTA) - Regulation E
Requirement: Consumer protections for electronic fund transfers, including error resolution and disclosure requirements.
Our Compliance:
- Clear fee disclosures before transactions
- Transaction receipts and confirmations
- Error resolution procedures (60-day dispute window)
- Account access and transaction history
Gramm-Leach-Bliley Act (GLBA) - 15 U.S.C. § 6801
Requirement: Financial institutions must protect customer information and provide privacy notices.
Our Compliance:
- Comprehensive Privacy Policy (see Privacy Policy)
- TLS 1.3 encryption for data in transit
- AES-256 encryption for sensitive data at rest
- Annual privacy notice delivery
- Third-party service provider agreements
2. State Money Transmitter Licensing
Money transmission services require state-by-state licensing. PayGunner's licensing status:
| Category |
Status |
Details |
| Federal Registration |
✓ Complete |
FinCEN MSB Registration active |
| State Licensing |
In Progress |
Applications filed in required jurisdictions |
| Surety Bonds |
In Progress |
Securing bonds per state requirements |
| Net Worth Requirements |
✓ Met |
Capitalized in accordance with state minimums |
Note: Most states require money transmitter licenses. Typical requirements include:
- $25,000 - $500,000 minimum net worth (varies by state)
- $25,000 - $500,000 surety bond (varies by state)
- Background checks of owners and officers
- Business plan and compliance program documentation
- Ongoing quarterly or annual reporting
We operate in full transparency regarding our licensing status and will update this page as additional licenses are obtained.
3. Firearm Industry Compliance
3.1 Our Role: Payment Processing Only
Important Distinction: PayGunner is a payment processor, NOT a firearms dealer, manufacturer, or importer. We do not:
- Sell, transfer, or ship firearms
- Hold Federal Firearms License (FFL)
- Handle, store, or possess firearms
- Conduct background checks (responsibility of FFL dealers)
3.2 User Compliance Obligations
Users must comply with all applicable firearms laws, including:
Gun Control Act of 1968 (18 U.S.C. Chapter 44)
- Interstate transfers must go through FFL dealers
- No sales to prohibited persons (18 U.S.C. § 922(g))
- Age restrictions (18+ for long guns, 21+ for handguns)
- Background check requirements (NICS)
National Firearms Act (26 U.S.C. Chapter 53)
- Registration required for NFA items (suppressors, SBRs, machine guns, etc.)
- $200 tax stamp for most transfers
- ATF Form 4 approval required before transfer
- Post-1986 machine guns prohibited for civilian ownership
3.3 Prohibited Transactions
PayGunner prohibits payment processing for:
- Illegal firearms or firearms transfers
- Sales to prohibited persons
- Unregistered NFA items
- Post-1986 machine guns (except SOT dealers)
- Any transaction violating federal, state, or local law
See our complete Prohibited Items Policy.
4. Data Security and Privacy
4.1 Technical Security Measures
- Encryption: TLS 1.3 for data in transit, AES-256 for data at rest
- Password Security: Bcrypt hashing with salt
- Tokenization: Payment card data tokenized via Authorize.Net
- Two-Factor Authentication: SMS-based 2FA available for all accounts
- Access Controls: Role-based access restrictions, principle of least privilege
- Monitoring: 24/7 security monitoring and logging
4.2 Third-Party Service Provider Compliance
Our service providers maintain industry-leading compliance:
| Service Provider |
Service |
Compliance |
| Authorize.Net (Visa) |
Credit card payment processing |
PCI DSS Level 1, SOC 2 |
| Circle Internet Financial |
USDC reserve pool management |
NYDFS regulated, SOC 2 Type II, monthly attestations by Grant Thornton LLP |
| Postmark (ActiveCampaign) |
Transactional email delivery |
SOC 2 Type II, GDPR compliant |
| Twilio Inc. |
SMS authentication |
SOC 2 Type II, ISO 27001, HIPAA |
5. Consumer Protection
5.1 Transaction Transparency
- All fees disclosed before transaction completion
- Real-time transaction confirmations
- Complete transaction history available 24/7
- Detailed receipts with transaction IDs
5.2 Dispute Resolution
- 60-day dispute window for unauthorized transactions
- Dedicated customer support (support@paygunner.com)
- Investigation of all reported issues
- Reversal procedures for confirmed errors
5.3 Fund Security and Reserve Backing
- Internal Ledger System: Your account balance is tracked in our secure internal ledger database
- 1:1 USDC Backing: All user balances are backed 1:1 by USDC held in our reserve pool
- 100% Reserve Ratio: We maintain 100% backing at all times - for every dollar you deposit, we hold one dollar of USDC
- USDC Security: USDC is issued by Circle, a licensed and regulated money transmitter, backed by cash and short-term U.S. Treasuries
- Monthly Attestations: Circle provides monthly attestation reports by Grant Thornton LLP verifying 1:1 backing
- Instant Internal Transfers: Transfers between PayGunner users are instant and free because they only update ledger balances - no money leaves the reserve pool
- Withdrawal Guarantee: Your funds are always available for withdrawal, backed by liquid USDC reserves
6. Reporting and Transparency
6.1 Required Filings
PayGunner files the following reports as required:
- MSB Registration (FinCEN Form 107): Biennial registration renewal
- Suspicious Activity Reports (SARs): Filed within 30 days of detection
- Currency Transaction Reports (CTRs): For cash transactions over $10,000
- IRS Form 1099-K: Annual tax reporting for users exceeding thresholds
- State Quarterly Reports: Financial condition reports to state regulators
6.2 Audit and Examination
- Annual independent AML program audit
- Financial statement audits as required by state regulators
- Cooperation with regulatory examinations
- Ongoing internal compliance monitoring
7. Governance and Oversight
7.1 Compliance Structure
- Designated AML Compliance Officer: Responsible for BSA/AML compliance
- Compliance Committee: Oversees all regulatory compliance activities
- Legal Counsel: Advises on regulatory interpretation and changes
- Board Oversight: Regular compliance reporting to Board of Directors
7.2 Employee Training
- Mandatory AML training within 30 days of hire
- Annual refresher training for all employees
- Role-specific compliance training
- Regular updates on regulatory changes
8. Continuous Improvement
Our compliance program is reviewed and updated:
- Annually: Comprehensive program review and risk assessment
- Quarterly: Monitoring of regulatory changes and industry developments
- Ongoing: System enhancements based on transaction monitoring insights
- As Needed: Immediate updates in response to new regulations
9. Contact Information
For questions about our compliance program:
Compliance Department
Email: compliance@paygunner.com
Legal Department
Email: legal@paygunner.com
Privacy Officer
Email: privacy@paygunner.com
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Commitment to Regulatory Excellence
PayGunner is dedicated to operating at the highest standards of regulatory compliance. We view compliance not as a burden, but as a foundation for building trust with our customers, partners, and regulators.
