Venmo is the leading peer-to-peer payment app, with more than $1 billion transferred monthly. Although Google Wallet, Snapchat's Snapcash and a number of other solutions offer nearly identical features, PayPal's Venmo is one of the most popular.

But PayPal's peer-to-peer payment app is under investigation by the Federal Trade Commission (FTC) for possible violations of rules forbidding unfair and deceptive practices, according to the company's report to the Securities and Exchange Commission (SEC).

On March 28, PayPal received a Civil Investigative Demand from the FTC. This requires PayPal to come up with documents and answers to questions put to the company by the regulatory agency, and is the first step of a full-scale investigation.

If the FTC finds that PayPal engaged in unfair or deceptive practices, it could fine the company or even order it to change the way Venmo works.

The Federal Trade Act outlaws unfair and deceptive practices, defined as acts that either mislead or harm the consumer in some way. False advertising is one of the most common kinds of deceptive practice, while discrimination is a common unfair practice.

There's no word about why the FTC is investigating Venmo or what's inside the CID, but something about the highly popular peer-to-peer payment app must have irked regulators.

PayPal's SEC filing noted that regulators worldwide are taking a harder look at the payments industry and fintech lately, which could make business difficult not just for PayPal but other mobile payment companies as well.

But even after almost 20 years, regulators still don't know really where they stand on PayPal, let alone Venmo, which PayPal acquired in 2009.

PayPal is classified as a money services business in the United States for regulatory purposes. Thanks to other laws, PayPal must register as a payment company in each of the 50 states. That constitutes interstate commerce and brings PayPal under the authority of the Federal Trade Commission, which is usually barred from regulating other money services businesses like banks and payday lenders.

Because of this fractured regulatory framework, as PayPal described it to the National Conference of State Legislatures in 2013, the company and its products fall under the jurisdiction of the FTC, the Consumer Financial Protection Bureau, state regulators, the SEC and FinCEN, the Financial Crimes Enforcement Network.

As if that weren't enough trouble, PayPal has been accused of violating intellectual property rights and infringing patents. PayPal's massive patent library covers nearly everything in the ecommerce and fintech ecosystems, and the company has drawn criticism from antitrust regulators and competitors for monopolizing the basic ideas behind online payment transfers.

In 2010, a Connecticut company sued eBay, Paypal's parent company at the time, for nearly $4 billion, alleging that eBay stole trade secrets and infringed its patents, according to a story by Reuters. The lawsuit alleged that PayPal features like Pay Later and Buyer Credit were stolen from XPRT Ventures' pending patents in 2001.

On the bright side, the first quarter of 2016 was PayPal's most profitable ever. eBay only spun off PayPal as a separate company in late 2014, so its history is not very long, but if the investigation into Venmo is any guide, it promises to just as troubled by regulatory woes and patent wars as it was under eBay's wing.