I am making an app that rewards users with real money for using the app. The money comes from the profit I get from ads the user views. Basically, I am sharing my ads profit with my users.

However, when I told my friend about the app, he told me that I can be accused of money laundering. Is that even possible? Should i be worried? He told me that when I transfer money to the users' bank accounts, the banks will be inquiring about the source of the money. When asked, the users will say that they earned it from an app. Once multiple users report this, the bank may inform the police. Now to eb clear this how the process goes:

  1. A user downloads my app through the Play Store or Apple Store.

  2. While they are using the app, Google and Microsoft ads are shown.

  3. The user uses the app till he accumulates, say, $10 worth of ads seen.

  4. The user inputs his bank account's information.

  5. The money I get from the ads networks will be transferred to my bank account.

  6. From my bank account, I will transfer all the money to all the users that have reached the payout.

Basically, I get my money from Google Ads, which is legitimate money for my hard work on the app. Then I transfer this legitimate money to people who have helped me get it. It's really obvious that the banks will notice strange transactions, and I have no doubt they will be questioning me. Worst case scenario, they call the police and the police questions me. Is there any reason I should worry? Am I doing anything illegal?

Another question

When my friend warned me about money laundering, I thought of transferring to Bitcoin wallets, rather than to bank accounts. In this case, wouldn't it be harder for me to prove the legal source of money?


Can I get in trouble for transferring money to multiple people's bank accounts? And can I avoid getting into the bank or police questioning by using Bitcoin to transfer to users instead? Or will it get into deeper trouble because it will be harder to prove the money's source? And if there is no escape for the bank or police questioning, do I have the legal right to do such a thing?


When I get the money from the ads, I pay all transaction fees and taxes, so i am paying everything the banks and government asks for.

  • What country. Are you planning to do this via personal account or creating company. Are payments to users in same country or are they located world wide
    – Dheer
    Commented Feb 3, 2018 at 7:18
  • Via a personal account, it will be international transfers. Commented Feb 3, 2018 at 8:19
  • 10
    If you’re not laundering money, then it doesn’t count as money laundering. Why are you worried? I’d be more concerned about it being against Microsoft and Google’s terms of service. Check that first or they might cancel app revue payments or block your app.
    – Cape Code
    Commented Feb 3, 2018 at 15:15
  • 2
    On a completely different topic, why would your users trust you with their bank account information? What does your app do aside from show ads?
    – chepner
    Commented Feb 4, 2018 at 0:14
  • 5
    Ignore your friend, they clearly have no idea what money laundering is, you've just described a business.
    – quid
    Commented Apr 24, 2019 at 4:45

5 Answers 5


There is nothing illegal about what you are proposing, however, the ad networks will shut you down very quickly for breaking their terms of service. If you think about it from the point of view of the advertisers, surely they would not want to pay money for their ad to be shown to someone who has incentive to watch the ad but no intention of buying their product.

  • 6
    That's how the mobile ad scene works. You are playing game A, and it says "watch an ad to get some gold" so you see an ad about game B.
    – Almo
    Commented Aug 8, 2018 at 14:20
  • 1
    @Almo - I disagree. To me (and I believe the ad networks would agree with me), there is a difference between "watch an ad to get some gold" and "rewards users with real money for using the app". In the normal scenario, users are watching ads in order to further themselves in the game. In OP's scenario, the point of the game is to make money, which is entirely different. Imagine if OP paid out gold for the game instead of real money. Would anyone play the game?
    – TTT
    Commented Apr 24, 2019 at 16:17

What you are trying to do is perfectly legal. Even if investigated by Bank or relevant authority things are fine in principle.

If you are earning 100 and distribute 20 to 10 people nobody cares. If you are earning 1 million and distribute 100K, quite a few questions will be asked.

Your book keeping should be accurate. It shouldn't appear you are asking people to see adv, but not paying promised revenues... Etc

Best start this under a limited liability company

  • So if I am an individual, doing it from my personal account, it would be perfectly fine? Commented Feb 3, 2018 at 8:23
  • @EpicDragon68 yes. Keep the book of accounting properly and there is no problem
    – Dheer
    Commented Feb 3, 2018 at 9:55

Banks have to report amounts being transferred of $10,000 or more (depending on country this amount might be different).

If you are transferring amounts for just under $10,000 (say $9,900) multiple times to try and have the amounts avoid the reporting process, then you might get reported to the government and police.

If you are transferring amounts of $10 to multiple different people (for which you have a legitimate reason for doing so) then the banks and the government/police will not be worried one bit about what you are doing.

  • Isn't the 10K rule just for cash transactions?
    – TTT
    Commented Feb 3, 2018 at 16:23
  • I don't believe that's correct. AFAIK it's only for cash, and it really only makes sense for cash. The point of reporting is to provide a trace of the funds. Electronic transfers already have a trace so reporting isn't necessary. Furthermore, banks perform many (millions?) of transactions per day that are over $10K. That would be an insane amount of reporting if every one had to be documented. As a side note, I don't feel this answer is relevant even if you were correct. Just because something isn't reported doesn't automatically make it legal.
    – TTT
    Commented Feb 5, 2018 at 16:49

This is not money laundering. Money laundering applies to money obtained from criminal activity. When you process money, and depending on the nature of your business, there is some due diligence you have to do to check if your customers are criminals, like know your customer (KYC) regulations.

Relatedly, there is also the question of taxes. The $10 your user gets in the example is income, and the IRS expect it to be declared on tax forms. It must also be declared as the correct type of income because they tax different types in different ways. I imagine at some point you will have to start mailing out tax forms to all of your users around February, that shows money they received from your app, so they can include it in their taxes.

This is a complex topic and if you intend to do business in the way you describe, you should really talk to a lawyer, accountant and/or compliance specialist as soon as possible. Yes, it is expensive, but that is the cost of doing business in the finance industry. You will often see small companies ignore the regulations and fly under the radar, but don't assume that is okay to do - as soon as you start making real money, the authorities will take notice and want to punish you, and they may even do so before.


Money Lounder is about converting illegally acquired money (typically in physical currency) into freely usable seemingly legal money (typically in electronic accounts).
Imagine a drug lord that collected 20 mio $ from junkies in cash. What does he do with a truck full of cash?

As long as you can proof - if requested - where your money comes from, and that it was legally acquired, you have nothing to worry about.
Those laws are to catch people that cannot prove the original cash was legally acquired, and they are about large amounts of money.

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