In the last decade, new payment forms known as peer-to-peer (P2P) payments have become widely accepted and mainstream across the United States. Driven by young consumers, these innovative platforms overcame many barriers presented by traditional payment systems. With this innovation, however, comes increased potential for abuse. P2P platforms operate outside of pure banking transactions, allowing for quick payments through either fiat currency or cryptocurrency between individuals, making these applications ripe for criminal activity. Although the United States has robust money laundering laws, P2P platforms do not fully fit within their boundaries, allowing criminals to abuse the system to move and access illicit funds. These laws serve as a solid foundation for anti-money laundering procedures on P2P systems, but with some finetuning, Congress can extend these regulations to fully capture criminal conduct across P2P applications. This Note analyzes how P2P payment applications fit within traditional financial technology regulation. This Note argues that, under federal law, P2P platforms should enhance their risk-based customer monitoring to surveil user accounts that link multiple payment forms, institute a short screening period on transactions for anti-money laundering risk compliance, and rigorously assess cryptocurrency transfers, similar to how they assess fiat currency transfers.
Rohena Rajbhandari, (Ven)mo Money, (Ven)mo Problems? How Money Laundering Permeates Peer-to-Peer Payment Platforms, 63 B.C. L. Rev. 669 (2022), https://lawdigitalcommons.bc.edu/bclr/vol63/iss2/6