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P2P FX exchange

Financial discussion for any financial queries for Expats
Street66
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P2P FX exchange

#263376

Postby Street66 » November 10th, 2019, 6:06 pm

Hi Lemon Fools,

Quick question. I've been an expat for many years now but we are close to returning home. I've been looking at a number of different ways of transferring my cash balances back into GBP - using the banks, FX houses, but also (via a network where i'm based) of P2P exchange. In this latter option, we meet up and a 3rd party transfers funds from his account to mine, and when the funds hit my account I hand over the equivalent cash in local currency as per real time FX mid-market rates.

He and I both are better off (no spread or fees), but I'm concerned there might be other risks involved. What things should I be worried about - given that I can see in real time the funds arriving in my account.

TIA,
Street66

Spet0789
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Re: P2P FX exchange

#263386

Postby Spet0789 » November 10th, 2019, 7:48 pm

You can now transfer FX very cheaply if you pick a good provider. I don’t think P2P FX is worthwhile. It’s the most liquid market on the planet. The marginal gain from cutting out the middle man is very small and not worth the hassle and risk.

P2P makes sense for lending, where the banks used to borrow at 3% and lend at 6%. But in FX where they buy at 1.2102 and sell at 1.2103? No point.

What you describe sounds odd to me. Why should the other party take settlement risk (ie he transfers first) but you take none?

PinkDalek
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Re: P2P FX exchange

#263394

Postby PinkDalek » November 10th, 2019, 9:13 pm

Street66 wrote:... I'm concerned there might be other risks involved. What things should I be worried about - given that I can see in real time the funds arriving in my account.


Being investigated for suspected money laundering or something similar crossed my mind as something I’d worry about. What evidence will be available to show why you received these funds from a total stranger and that you paid them out in local cash that you happened to have lying around?

Are you talking about large sums?

Street66
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Re: P2P FX exchange

#263437

Postby Street66 » November 11th, 2019, 8:37 am

Being investigated for suspected money laundering or something similar crossed my mind as something I’d worry about. What evidence will be available to show why you received these funds from a total stranger and that you paid them out in local cash that you happened to have lying around?


This is my only real concern. The sums aren't huge - i've done it 5 times each roughly 8-10k GBP - but am wondering at what point the bank might start to investigate? I guess I could show bank statements showing cash withdrawals on the same day(s) as the funds land in my account, but then there's still a risk that the 3rd party is washing their cash.

I suspect you're right in that the frictional costs of using a good exchange house means the risk of the P2P option probably aren't worth it.

Thanks!

GN100
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Re: P2P FX exchange

#272989

Postby GN100 » December 23rd, 2019, 1:39 am

I'm very late to this thread but the real and worsening problem is the money laundering regulations and the continual tightening of them. I transferred via my UK bank to a UK lawyer ref a house purchase. It was totally legitimate money but I had a lot of paperwork gathering to do before the UK Lawyers would accept the funds. I think you might have a problem should this happen to you.

GN


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