Compliance teams use automated transaction monitoring platforms to scan historical payment streams and identify hidden methods used by bad actors to bypass regulatory thresholds, primarily Structuring and Smurfing.
Deconstructing Financial Evasion Methods
- Structuring: The practice of breaking up a large cash transaction into multiple small deposits that sit just under domestic regulatory reporting limits (such as $10,000 in the US), intentionally attempting to avoid triggering automated currency transaction reports.
- Smurfing: A advanced money laundering method where a compliance target routes structured cash deposits through a wide network of independent runners (smurfs) and different banking institutions simultaneously, attempting to hide the ultimate beneficial owner of the funds.
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