Jun 4, 2025

Smurfing and Structuring

Understanding Structuring in Banking

Structuring is a term commonly used in the banking and financial sector, particularly in the context of anti-money laundering (AML) regulations. It refers to the act of breaking up large financial transactions into smaller ones to avoid detection or reporting requirements.

Definition and Purpose

What is the concept of structuring?

Structuring, also known as “smurfing,” is a method used to evade legal reporting thresholds set by financial institutions. For example, in the United States, banks are required to report cash transactions exceeding $10,000. To avoid this, individuals may deposit smaller amounts, such as $9,000 or $9,500, over several days or at different branches, so that each transaction falls below the reporting threshold.

Examples of Structuring

What is an example of structuring in banking?

An example of structuring in banking would be a person who has $50,000 in cash and wants to deposit it into a bank account without triggering a Currency Transaction Report (CTR). Instead of depositing the entire amount at once, the individual makes five separate deposits of $10,000 each, or even smaller amounts like $9,500, at different times or locations. This deliberate attempt to avoid the reporting requirement constitutes structuring and is illegal.

Legal Implications

Structuring is considered a financial crime in many jurisdictions. Financial institutions are required to monitor for suspicious activity, including patterns that suggest structuring. If detected, banks must file a Suspicious Activity Report (SAR) with the relevant authorities.

Thresholds and Detection

How much money is considered structuring?

There is no specific amount that defines structuring; rather, it is the intent to avoid reporting requirements that matters. However, in the U.S., any cash transaction over $10,000 must be reported. If someone consistently deposits amounts just under this threshold, such as $9,000 or $9,500, it may be considered structuring if the intent is to evade reporting.

Related Terms

What is the meaning of smurfing?

Smurfing is another term for structuring. It refers to the practice of breaking up large transactions into smaller ones to avoid detection. The term “smurf” comes from the idea of using many small agents (like the cartoon characters) to accomplish a larger goal. In banking, smurfing is a common technique used in money laundering schemes.

Smurfing and Structuring