As far as I understand it, an SEC-registered investment advisor that doesn't hold the client's assets doesn't need extra regulation pertaining to custody. If a robo-advisor like Betterment (although I understand that they're Broker-Dealer-registered) is registered as an RIA and sends client orders straight to the exchange through a broker like Interactive Brokers, do they have to register as a money transmitter? How do the laws change for assets like crypto (sending an order straight to Binance, Coinbase, etc)

  • Please clarify your specific problem or provide additional details to highlight exactly what you need. As it's currently written, it's hard to tell exactly what you're asking.
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    Oct 12, 2021 at 16:08
  • @Community I answered my own question. I can change the question but I thought it was pretty clear. A Money Transmitter and a Registered Investment Advisor are pretty well-defined legal entities, meaning my question about when an RIA has to register as an MT seems pretty straightforward Oct 12, 2021 at 16:22

1 Answer 1


A Money Transmitter (MT) is a subset of Money Services Businesses (MSBs) according to the definition of an MSB (31 §1010.100(ff)). Exempted from inclusion in MSB definition is "a person registered with, and functionally regulated or examined by, the SEC." As an SEC-registered investment advisor, it sounds like such a robo-advisor would not need to register as a money transmitter business as well.

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