ACDC welcomes new rules to combat money laundering in real estate and investment funds

The Anti-Corruption Data Collective today welcomed final rules issued by the Department of Treasury that, once implemented, will apply anti-money laundering obligations to professionals working in residential real estate across the United States as well as to certain categories of investment advisors.

The real estate rule creates a permanent, nationwide system through which professionals in the real estate sector must collect and report information about the beneficial owners of legal entities involved in non-financed real estate transfers. 

The investment advisors rule brings Registered Investment Advisors (RIAs) and Exempt Reporting Advisors (ERAs) under the definition of financial institution in the Banking Secrecy Act, requiring them to implement anti-money laundering programs required of the rest of the financial sector. 

David Szakonyi, co-founder and Research Lead at ACDC said:

“These rules are a critical and long-overdue step towards getting dirty money out of two areas of the US economy that face some of the highest risks of money laundering. While we’re still digesting the full texts, the real estate rule is clearly far more comprehensive than the previous limited framework, while the investment advisors rule brings a twenty-year deferral of regulation to a close. Congress now needs to equip FinCEN to act on the information it receives thanks to these rules, and finally stop the world’s criminals, kleptocrats and their enablers from stashing and laundering their dirty money in U.S homes and investment funds.”

Until the new rule is implemented, the US residential real estate sector is regulated only by a temporary pilot program known as the Geographic Targeting Orders (GTOs), which require title insurance companies in high-risk counties to report all-cash corporate purchases above a certain threshold to Treasury’s Financial Crimes Enforcement Network (FinCEN). A 2022 working paper by ACDC analyzed millions of US real estate transactions and found the program had had no aggregate impact on all-cash transactions in those counties, nor caused substitution into other kinds of deals.

Investment advisors, meanwhile, have operated in an unregulated space since FinCEN was unable to finalize an anti-money laundering rule proposed in 2015. Since then, the value of assets managed by U.S advisors to private investment funds has doubled to $21 trillion.

According to ACDC’s analysis, U.S hedge, private equity, venture capital and other private investment funds manage $1.7 trillion in assets for unknown overseas owners, creating risks not only for money laundering, but sanctions evasion and the acquisition of sensitive technologies.

Sazkonyi continued:

“We look forward to monitoring how these rules are implemented together with our members and partners, while continuing to conduct data-driven research and investigations to identify and highlight the remaining loopholes. Next, Treasury should propose rules for the high-risk Commercial Real Estate Sector and require investment advisors to systematically collect information on the ultimate beneficial owners of their clients.”

A recent report by ACDC, Global Financial Integrity and the FACT Coalition identified $2.6 million in illegal or suspicious funds that had entered the U.S financial system through commercial real estate. According to FinCEN’s latest regulatory agenda, the agency will propose AML regulations for commercial real estate in December 2025. 

Notes to editors

Real Estate and Private Investment Funds have been among ACDC’s focus areas since the Collective was founded in 2020.

For interviews and comment:

David Szakonyi, Research Lead, (EST time zone): david@acdatacollective.org
Michael Hornsby, Impact Manager,  (CEST time zone): michael@acdatacollective.org

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