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:
A user downloads my app through the Play Store or Apple Store.
While they are using the app, Google and Microsoft ads are shown.
The user uses the app till he accumulates, say, $10 worth of ads seen.
The user inputs his bank account's information.
The money I get from the ads networks will be transferred to my bank account.
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?
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.