When a Media Buyer May Come Under Financial Monitoring Scrutiny

It happens that an affiliate marketer quietly earns their daily income, and then their account gets blocked and they have to provide the bank with documents proving the origin of funds. All because of financial monitoring, which every financial institution is required to carry out. 

Today we explain in which cases a webmaster may come under the bank's financial monitoring radar, and how to protect yourself from potential issues with the tax authorities. We break it down using examples from public sources. 

How Financial Monitoring Works in Ukraine

Financial monitoring is a mechanism for reviewing financial transactions. It was created to combat terrorism financing and money laundering. In simple terms — it's a tool for tracking suspicious transfers. 

Financial monitoring applies to individuals, sole proprietors (FOP), and companies. It is conducted by banks and payment systems in accordance with current legislation. Information about high-risk or suspicious payments is reported to government authorities. 

A transaction may be flagged if it:

1. Exceeds the threshold of ₴400,000. For representatives of the gambling business — from ₴55,000. 
2. Looks suspicious. A bank or payment system may take interest in a transaction that appears uncharacteristic for the user. 
3. Involves cross-border transfers. All transactions involving offshore zones are subject to strict monitoring. 

For a bank, a trigger for review is systematic payments of any amount if the client is not a registered sole proprietor. If transfers from different people arrive in the account every day, the account holder will need to explain their origin. 

There are more than 70 criteria that can trigger financial monitoring by a bank or other institution. They are outlined in the NBU resolution dated May 19, 2020. The official approach hasn't changed since then, but in practice it's clear that enforcement has tightened considerably. 

If a bank deems a transaction suspicious, it will request documents and an explanation from the account holder. During the review period, funds may be frozen, and in some cases, upon completion, financial institutions terminate their business relationship with the client. 

It's important to understand that financial monitoring is not a tool for total control over citizens' money flows, but a mechanism for combating terrorism financing, money laundering, and tax evasion. 

When an Affiliate Marketer Gets on the Service's Radar

Webmasters who are unfamiliar with tax legislation and the principles of financial monitoring believe they can work without a FOP registration as long as their monthly income doesn't exceed the ₴400,000 threshold. In reality, this is a myth worth letting go of. 

Recently, banks have been requesting proof of funds origin more frequently from clients with relatively low transaction volumes. This is especially true for users of cryptocurrency exchanges who earn through P2P trading. 

Monobank doesn't just block the accounts of crypto traders — it also refuses further service regardless of the client's prior activity history. This means every such transaction carries the risk of losing access to your card. 

If an affiliate network pays out in crypto and the webmaster exchanges it via Binance or another exchange, the bank may take interest in the source of funds. The account will be blocked along with the money, and withdrawing them won't happen quickly. 

The only reliable option for stable operations is registering as a FOP and paying taxes on crypto transfers. We published a detailed guide on this topic with step-by-step instructions and tips. 

There are also apps that allow you to spend crypto like fiat, for example Trustee Plus. It is effectively a foreign company, so transactions don't fall under Ukrainian financial monitoring, though an internal AML procedure is in place within the system. 

Trustee does not hold a financial institution license, but given the app's growing popularity, the project may well be required in the future to share transaction data with the relevant Ukrainian authorities.

Money-makers shouldn't overlook the administrative and even criminal liability for tax evasion and unlicensed business activity. These offenses carry penalties ranging from fines to imprisonment for large-scale tax non-payment. 

As a reminder, Ukraine periodically introduces stricter controls over money circulation. Since August 2023, topping up cards via terminals has required mandatory identification by phone number, and for payments exceeding ₴29,999 — via BankID. 

The key to safe and stable work in the affiliate market is registering as a sole proprietor (FOP) and paying taxes. This way, you don't have to worry about financial monitoring and can provide documents upon the bank's request. The tax burden in Ukraine is currently low, and an accountant's services cost about as much as 5 decent farm accounts. So we recommend legalizing your professional activity!