There are various ways of looking at it, rather than just the money transmission angle.

State regulators or federal regulators will look at the intent of your app. Some pertinent questions are:

  • Does your app facilitate the transactions? Yes!
  • Can the marketplace charge a fees for such a facilitation? Yes!
  • Does the app aid in the transfer of money between two parties that may be dealing in illicit funds? Yes!
  • Does the app aid in the transfer of money between two parties that may be used for purposes of money laundering? Yes!
  • Can a transactions happen on this app, that would allow funding to terrorists groups/person take place? Yes!
  • Does the app screen in real-time PEPs? No!
  • Does the app have the ability to stop a marketplace transaction that has been flagged? Yes or No!
  • Can the app verify the identity of the person in compliance to the banking standards where it is being used? No.

Given the above answers, your app would clearly be violating a lot of state and federal regulation related to identity, compliance, foreign exchange, money transmission, banking secrecy act, data privacy acts, consumer protection, etc.

All the while making you an accomplice in willfully evading the path of licensing. This is how the prosecutor will play out.

They will show in court that a money transmitter license was a requirement for such a business and you opted not to have it.

So, the app will not be disruptive in the current set of laws around which money transmission is handled.