Bank-Card Arbitrage: What It Is and What Risks the Holder Faces
Telegram chats are full of questions such as “what is card arbitrage” and “cards for arbitrage — what does it mean?” In short, the term covers a scheme where a bank card is used for quick P2P currency swaps (e.g., USDT ↔ UAH) or to pay ad budgets for third parties. Below we explain the P2P loop, AML/KYC risks, and what Ukrainian law says.
1. How the P2P Arbitrage Scheme Works
- The card is topped up via a P2P order on a crypto exchange (low fee).
- Funds are spent on Facebook Ads or resold at a higher rate.
- The spread (1-3 % per cycle) becomes profit.
Main upside: fast turnover outside cash limits. Downside: banks flag the pattern as high-risk.
2. AML / KYC Risks and Card Freezes
| Trigger | Bank reaction | How to reduce risk |
|---|---|---|
| Many incoming P2P payments | “Source of funds” request (AML law) | < 5 transactions per day |
| UA card pays US-based BM | Risk Payment → temporary freeze | Use a virtual BIN card matching the ad GEO |
| Spikes of 1 000 UAH every 10 min | Manual monitoring, possible hold | Split amounts, respect bank limits |
UA fintech forums report that one in four accounts with heavy P2P cycles gets reviewed manually.
3. Ukrainian Law: What Penalties Apply
- Law № 361-IX (AML). The bank may freeze funds up to 30 days if a transaction looks suspicious.
- Tax reporting. Monthly turnover > 50 000 UAH triggers automatic reports to the tax office. Unexplained income → fines.
- Unlicensed “cash services.” Mass P2P arbitrage can be treated as financial intermediation without a license (Art. 164-1, penalty 17 000–34 000 UAH).
Legal Alternatives
- Virtual P-cards for the first bill — issue cost from $0, BIN = ad GEO.
- BM-250 with invoice billing — removes the $50 cap and lowers Declines.
FAQ
- Can I use family members’ cards?
- The legal owner is liable; banks contact them if the card is frozen.
- How to prove funds are legit?
- Keep P2P order screenshots and an agreement with the advertiser; provide an Ads spend report.
- Are “savings” cards safer?
- No. UA banks apply the same AML rules to all debit cards.
Bottom line: card arbitrage profits from P2P spreads but carries AML checks and possible freezes. Dedicated virtual cards and invoice billing are safer than risking a personal bank account.