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by JusticeJuice 1223 days ago
Excellent essay.

The 10k rule mentioned is totally a thing. I was at a company implementing AML for the first time, and the compliance team told us to add it, which I always thought was an inane. They came up with a variety of rules with just arbitrary figures in them, including the 10k rule. Didn't matter if you had previously been transacting 7k regularly before jumping to 10k, didn't take overall volume into account, didn't look for unusually high acceleration of transactions. Just a magic number pulled out of industry precedents.

The interesting thing was if you read the actual legislative requirements it was excessively vague, like "take reasonable steps to find suspicious transactions". Institutions don't build software if they don't have to. The goal always was to do the minimum to check the box, not actually find laundered money.
2 comments
diognesofsinope 1222 days ago
The article is leaving out the fact that the $10k threshold is not at the discretion of the bank. It comes directly from the Bank Secrecy Act (https://en.wikipedia.org/wiki/Bank_Secrecy_Act).

The magic number is not the bank's magic number, it's politician's magic number.

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buildbuildbuild 1222 days ago
It’s also a number that inflation makes convenient for warrantless intelligence gathering.
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raincom 1223 days ago
These days, AML algos look at cash transactions in a sliding window fashion: $2k ATM deposit on Jan 1, 2022; $3k cash deposit on Jan 21, 2022; $3k cash deposit on Feb. 28, 2022; $3k cash deposit on March 18, 2022. Boom, in the span of 3 months, $11k cash deposits, back office (not tellers) can file a SAR.
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nulbyte 1222 days ago
Sort of. If these are normal transactions given the customer's trade, no report is made. SARs are only filed if you are suspicious (that's what the S stands for) that a crime has occurred. This is where knowing your customer comes into play.

CTRs, on the other hand, have a limit of $10,000, and while it is aggregate, it's aggregated over a single business day. CTRs do not require suspicion. They are routinely filed for ordinary, legal transactions.

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raincom 1222 days ago
Just go to bankersonline.com and see the kind of responses there. These AML folks rather file SARs for every trivial thing than otherwise.
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