What is smurfing? Answer at BYJU’S IAS (2024)

FAQs

What is smurfing? Answer at BYJU’S IAS? ›

Smurfing is a money-laundering technique that involves the structuring of large amounts of cash into multiple small transactions. This is done in order to conceal the source of the money.

Smurfing is the practice of dividing a large sum of money into smaller transactions that remain below the reporting threshold. The purpose of smurfing is to avoid detection by regulatory authorities, which mandate that financial institutions report cash transactions exceeding a specific limit.

Smurfing is a money-laundering technique involving the structuring of large amounts of cash into multiple small transactions. Smurfs often spread these small transactions over many different accounts, to keep them under regulatory reporting limits and avoid detection.

Typically, smurfing involves distributing the cash obtained through illegal means among multiple individuals, known as "smurfs," who then make deposits into various bank accounts at different financial institutions.

Smurfing could result in the loss of revenue due to missing credit card or PayPal fees. For example, if you charge customers a $100 fee and they make five purchases of just $50 each, they may be smurfing and you may be missing out on $250 in fees.

Smurfing is a money-laundering technique that involves the structuring of large amounts of cash into multiple small transactions. This is done in order to conceal the source of the money.

Going forward, a main account found associated with a smurf account could result in a wide range of punishments, from temporary adjustments to behavior scores to permanent account bans.

Examples of smurfing

A group of smurfs depositing $10,000 worth of illegally-obtained money into multiple bank accounts over the course of a week. Cuckoo smurfing: In cuckoo smurfing, an organized syndicate works with a corrupt remittance service provider abroad.

It's called smurfing due to two very good players in a game called Warcraft II. Players would simply avoid playing them if they saw their usernames, so they created new accounts to combat this, choosing “PapaSmurf” and “Smurfette” and the term has stuck since.

What is considered smurfing? ›

"Smurfing" describes someone who created a second account to play against lower-ranked players.

A smurf is a term used for a competitive game player playing on an alt (alternative) account in order to play against lower-ranked players. As you can imagine, coming across a smurf in a competitive online game can be very frustrating. I myself have run into multiple smurfs in the competitive games I play.

Smurfing is an illicit financial strategy, which involves breaking large sums into multiple smaller transactions to evade detection in money laundering operations. This method leverages the vulnerabilities in financial systems and presents a significant challenge for regulatory authorities.

What is the penalty for smurfing? This conduct breaches AML/CTF rules and can attract severe legal penalties for those involved. Engaging in smurfing could result in fines or even jail time, depending on the amount of money being laundered.

In proven cases of smurfing, we'll take direct action against the account, and in some cases their main account as well.

What is Smurfing in gaming? The term 'smurf' is used in gaming to describe a player in an online game that creates a new account to play against lower-ranked players, however, it can be used as an all-around term for describing a player who uses an alternate account or multiple accounts.

Smurfs - A popular method used to launder cash in the placement stage. This technique involves the use of many individuals (the"smurfs") who exchange illicit funds (in smaller, less conspicuous amounts) for highly liquid items such as traveller cheques, bank drafts, or deposited directly into savings accounts.