Banks and money laundering in cryptocurrencies – how do banks find out?

money, laundering

Money laundering is a crime and you probably have heard many times that banks do not trust cryptocurrencies precisely because of the fear of money laundering. But how can banks find out about this illegal activity? Let’s take a closer look.

Why it matters

If you have a bank account, you have certainly undergone KYC (know your customer) and due to that, the bank has found out the information it needs to further investigate illegal activities. In cryptocurrencies, however, this option is often not available and it is up to you to be careful about whom you send your money to. There is no one there, who would help you in case of a mistake.

What you can hear

Basically, it can often be heard that cryptocurrencies can be a great option for money laundering. This is often the reason why banks do not trust cryptocurrencies, and once you want to trade cryptocurrencies, the bank carefully checks every transfer to fiat money.

How are they doing it?

The starting point is to follow the FATF guidelines for the AML indicator. Transaction-related signaling may include payments made in small amounts or in recurring quantities that fall below the reporting threshold. It can also be a deposit that is not in line with the customer’s profile. These instructions are very detailed and comprehensive. They also include scenarios that clearly show what financial institutions should look for.

How does it work in real life?

In the real world, this is an automated activity for institutions that follow the rules. There are already tools that can tell you whether the crypto used in a transaction is illegal, so they can block such a transaction. Such tools allow them to track transactions on all major blockchains 24/7 and in real time. In these days, money laundering could be detected very quickly.

KYC and Platon Finance

Platon Finance fully complies with the strictest AML/KYC rules, even though it is not required by the Czech law. And moreover there is a customer service that will help you with any problem that might arise, so you have nothing to worry about.


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