Exchange Withdraw Limits -- Are Crypto Users Being Forced to Structure?
In the past few months many exchanges have implemented tighter withdrawal controls. Higher levels of verification to be able to take out your own money. For instance legacy accounts on Bittrex used to have unlimited withdrawals with no verification needed. Then it was changed to something like 2 BTC a day then down to .4 BTC. So if you have a standard account and want to withdraw more than .2 BTC you have to do it over several days. They claim this is to comply with regulations. Now lets look at the definition of structuring from the wiki:
Structuring, also known as smurfing in banking industry jargon, is the practice of executing financial transactions such as making bank deposits in a specific pattern, calculated to avoid triggering financial institutions to file reports required by law, such as the United States' Bank Secrecy Act (BSA) and Internal Revenue Code section 6050I (relating to the requirement to file Form 8300). Structuring may be done in the context of money laundering, fraud, and other financial crimes. Legal restrictions on structuring are concerned with limiting the size of domestic transactions for individuals.
Now being forced to make many small transactions under $10000 in the US seems to perfectly fit the definition of structuring. To me it looks like crypto users are being forced by regulations to violate laws. Is the government attempting to setup users for future structuring charges? Unlike the blockchain itself exchanges have records of all your transactions and may have to report those transactions to regulators. See the recent decision to make Coinbase hand over all accounts that transacted more than 20k last year (or was it for 2016).
Just something to keep in mind when moving coins to/from exchanges. Even things like doing daily cash business deposits to their own bank accounts have landed people in jail. This just opens up another avenue for law enforcement to use against anyone they want to go after. From the small business, to the local trader, to someone that is just converting from one crypto to another.