Is the financial industry getting a break from continuously climbing penalties for anti-money laundering and other compliance shortcomings? A top-line indicator suggests that it is, though it would be unrealistic to conclude that enforcement is easing up.
According to compliance and client-lifecycle management company Fenergo, global penalties for AML, know your customer (KYC) and customer due diligence (CDD) deficiencies totaled $3.8 billion last year. That was down from $4.6 billion in 2024 and $6.6 billion in 2023.
There were regional contrasts and nuances. The U.S. is the leading jurisdiction by this measure, even as fines there dropped by 61% in 2025. (North America as a whole was down 58%.) EMEA penalties jumped by 767%. APAC’s rise was 44%, in part because the Monetary Authority of Singapore is intent on projecting trust in the city-state as a financial center.
Rory Doyle
The fast-growing digital-asset segment is “over-represented” in Fenergo’s aggregate numbers. According to data compiled by Kroll from TRM Labs and other sources, laundered crypto-linked funds more than tripled between 2024 and 2025, to $158 billion worldwide. “The U.S. Treasury estimates that up to $300 billion is laundered annually through the U.S. financial system, while illicit cryptocurrency transactions surged to the highest level in five years.”
Fenergo’s Rory Doyle, head of financial crime policy, stated, “The U.K. continues to show a steady and robust approach to AML enforcement, and the fines we saw in 2025 reflect just how long regulatory investigations can take.” Nationwide Building Society’s £44 million fine for ineffective risk and transaction monitoring systems was an example of “how issues that emerged during the COVID period are now working their way through the system and feeding into enforcement outcomes years later,” Doyle said.
The year’s biggest single penalty, an €835 million UBS settlement in France, was the bulk of that country’s $1.11 billion in dollar terms, second only to the U.S.’s $1.68 billion.
Doyle said U.S. figures were affected by regulatory staffing cuts and a government shutdown, so “this is temporary. Once capacity returns, enforcement will follow.”
Braden Perry
“As enforcement rebounds in key jurisdictions,” he added, “firms that fail to modernize their financial crime ecosystem will remain exposed. Those that prioritize investment in leading-edge-technology, with AI at the forefront, will be able to demonstrate robust AML controls and regulatory alignment while being far better positioned for the next wave of scrutiny.”
Braden Perry of the Kennyhertz Perry law firm, who has worked in government enforcement and as a chief compliance officer, views the downtrend as a result of the U.S. administration’s priorities and budgetary constraints, as opposed to “a lack of wrongdoing or noncompliance.” He agrees that “as agencies modernize, they will have more tools to monitor AML and other technical compliance matters, making surveillance easier from a staffing perspective.”
A Cornerstone Research-NYU Pollack Center for Law & Business report documented a shift in the overall regulatory climate under Securities and Exchange Commission Chairman Paul Atkins. The SEC initiated 56 enforcement actions against public companies and subsidiaries in fiscal year 2025, 30% fewer than in the year before. Priorities changed from those of Atkins’ predecessor, Gary Gensler, and Margaret Ryan came in as the new director of enforcement.
Ryan, who was senior judge of the U.S. Court of Appeals for the Armed Forces, resigned in March, after six months, and has been succeeded as of May 4 by David Woodcock from Gibson, Dunn & Crutcher.
Jonathan Scott
Jonathan Scott of CM Law in Austin, Texas, who spent 15 years with the SEC, said “56 investigations” is likely an undercount because they take place out of the public eye. “Cornerstone actually points out that those investigations resulted in 56 litigations/settlements." What is “remarkable” is “how few actions were brought since President Trump took office; 93% of actions against public companies and subsidiaries in FY 2025 (which started October 1, 2024) were brought at the end of the Biden administration.”
Another explanation for fewer cases is their duration, typically more than two years.
In the prior administration, “Republican commissioners objected to many of the enforcement actions pursued by the Democratic majority. It is therefore not surprising that now Republicans in control of the commission have dropped” or slowed some investigations, Scott observed.
“Reduction in aggregate penalties and official measures is not an indication of a more lenient regulatory climate,” said Alan Heimlich, president of Heimlich Law in San Jose, California. It may instead be a reset of priorities, a focus on higher-impact cases, serial offenders or systemic issues. View the dip as “a postural change and not a withdrawal,” he suggested.
Past statistics may therefore not be a reliable leading indicator. Regulatory personnel and staff sizes change, budgets get adjusted. Despite the deregulatory sentiment, Jonathan Scott is expecting a gradual uptick in enforcement as leadership settles in and defines priorities.
"In the short term, that will mean an increase in investigative subpoenas” and other SEC requests, he said. Atkins and Ryan had communicated that quality of enforcement would carry more weight than pure numbers, which Scott believes will increase over time closer to those of the Biden era.
Heimlich considers the cyclical tendencies and stresses the Importance of preparation: “When scrutiny returns, companies that have tight discipline in documentation, internal audit standards and escalation procedures are in a better position. The wise plan is to view compliance as an operational aspect of governance, rather than as a response to the amount of penalties last year.”