This is one of the most important articles I have written, because it addresses a problem that is growing exponentially and affects an increasing number of people – often innocent individuals who find themselves entangled in criminal proceedings for money laundering (Art. 299 of the Criminal Code) due to their involvement in peer-to-peer (P2P) cryptocurrency transactions.
The problem
P2P cryptocurrency exchanges (such as those available on Binance, Paxful, or LocalBitcoins) allow users to trade cryptocurrency directly with each other, without an intermediary. While this is technologically innovative and legally permitted, it creates significant criminal risks that most users are unaware of.
How does it happen?
The typical scenario:
- A person (let’s call them A) offers to sell cryptocurrency on a P2P platform.
- A buyer (B) purchases the cryptocurrency, paying to A’s bank account via regular bank transfer.
- Unknown to A, the funds transferred by B come from criminal activity (fraud, theft, drug trafficking).
- When the victim of the original crime reports to police, the trail leads to A’s bank account.
- A is now suspected of money laundering under Art. 299 of the Criminal Code.
The legal trap
Art. 299 of the Criminal Code is broadly worded. It penalizes anyone who receives, transfers, converts, or transports means of payment, financial instruments, or other values derived from criminal activity, or takes other actions that may frustrate or significantly impede the determination of their criminal origin. Critically, Art. 299 §5 provides that even a person who did not know but could have known the criminal origin of the funds may be held liable (negligent money laundering).
Why P2P is particularly risky:
- No KYC on counterparty – on most P2P platforms, you know very little about the person you are trading with.
- Direct bank transfers – funds flow directly through your bank account, making you a link in the money trail.
- Volume and pattern – regular P2P trading creates a pattern of receiving multiple transfers from different persons, which triggers AML alerts at banks.
- Bank account blocking – banks will freeze your account upon receiving suspicious activity reports, cutting off access to your own funds.
- Criminal investigation – even if you are ultimately cleared, the investigation can last years and involve seizure of your assets.
My advice
- Avoid P2P altogether – use regulated exchanges with proper KYC/AML procedures instead.
- If you must use P2P – trade only with verified users, keep detailed records of every transaction, set low limits, and document the source of counterparty funds.
- Monitor your bank account – if you notice suspicious incoming transfers, contact your bank immediately.
- If contacted by police – do not give statements without a lawyer present. Contact a lawyer specializing in cryptocurrency crime immediately.
The consequences of negligent P2P trading can be devastating: criminal record, asset seizure, frozen bank accounts, and imprisonment of up to 3 years. It is simply not worth the risk.
Paweł Osiński
Attorney, expert in cryptocurrency crime, money laundering, and AML regulations