Hand-to-hand money exchange between the US and Georgia: the risks and what the law says

Posts like this one are common in the groups: “I want to exchange money. I’ll give it to you in Brooklyn. I need it in Georgia.” The scheme is simple. One person hands over cash in the US, and another person pays out the same amount in Georgia. The money never really crosses the border, and there is almost no fee.

This is convenient, but it is risky, and in some cases it breaks the law, both in the US and in Georgia. This page explains what we found in official sources.

About this page. This is our own research, not legal advice. We are not lawyers. We publish the information as we found it in official sources, with no guarantee that it is accurate or complete. We may have missed something or misread it, or the law may have changed since. Anyone who uses this information does so at their own risk. This page does not say that any particular exchange is legal or illegal. This page does not cover immigration consequences. For immigration questions, New York City has a free legal hotline: 1-800-354-0365. Reading this page does not create an attorney-client relationship. All sources are listed at the end of the page. This page does not replace advice from a licensed attorney.

In short

Under US law, a person who does this often, or gains from it, may be treated as running a money transmitting business. Running such a business without a license and registration is a federal crime.
A person in the exchange does not know where the other side’s money came from. If it came from fraud, that person is helping move stolen money. US government agencies warn that this can lead to legal trouble.
If the other side does not pay, no one protects the person who handed over the money. There is no receipt and no company to sue.
For a cash transaction over $10,000, a bank files a report with a government agency. Splitting the amount into smaller pieces so that the bank does not file this report is a separate crime.

What US law says

Money transmitting as a business. A federal law (18 U.S.C. § 1960) punishes anyone who knowingly conducts, manages or owns an unlicensed money transmitting business. The penalty is a fine or up to 5 years in prison, or both. Under this law, money transmitting means transferring funds on behalf of the public, by any means, including to places abroad.

Under this law, a business is unlicensed, and so illegal, if:

it has no state license in a place where working without one is punishable. The law says directly that in this case it does not matter whether the person knew a license was needed;
it is not registered with the federal agency FinCEN;
or it moves money that it knows comes from crime or is meant to support unlawful activity.

A separate law covers civil forfeiture (18 U.S.C. § 981). Under it, property involved in a transaction that broke § 1960 or the money laundering laws (§§ 1956, 1957) can be taken by the United States.

New York State. Under the state Banking Law, no one may engage in the business of receiving money for transmission, or transmitting it, without a license. The state Department of Financial Services (DFS) issues the license. Under section 650 of the same law, unlicensed activity is a crime (a class A misdemeanor). It is a more serious crime (a class E felony) when a person knowingly receives for transmission $10,000 or more in a single transaction, $25,000 or more in 30 days or less, or $250,000 or more in one year or less. This section covers a person who does the unlicensed business and receives money for transmission.

Who this covers. A federal rule treats anyone who accepts money from one person and transmits it to another place or person, by any means, as a money transmitter. FinCEN says there is no minimum dollar amount here, and the rule applies whether or not the person does this on a regular basis.

The rule has an exception. It does not cover an individual who does this infrequently and not for gain or profit. The exception needs both conditions at once. FinCEN explains that “infrequent” means activity that is rare, and that “gain” covers money and also other economic benefits, such as an exchange of valuable favors. In our reading, an exchange-rate margin or a fee is a money gain, so the exception no longer covers that case.

This exception does not mean that any exchange is legal. It covers only one federal rule. The part of the New York Banking Law that requires a license, which we read, does not mention such an exception.

The same federal rule says that each case is judged on its facts and circumstances. So the law does not draw a clear line that marks where a person is safe.

It follows that the person at the greatest risk is the one who arranges these exchanges: who connects the two sides, does it often, or keeps the exchange-rate margin.

Cash and the bank. In the US, a bank must file a report (Currency Transaction Report) with a government agency for each cash transaction over $10,000. This is a routine step and not a problem in itself. The problem is when a person splits an amount into smaller pieces on purpose so that the bank does not file this report. This is called structuring, and it is a federal crime (31 U.S.C. § 5324). The penalty is up to 5 years in prison. Here the law punishes the purpose of avoiding the report, not the source of the money. The penalty rises to up to 10 years when it happens while breaking another US law, or as part of illegal activity over $100,000 in 12 months.

Carrying cash across the border. US Customs and Border Protection (CBP) says that a person who carries, mails or ships more than $10,000 in cash out of the US must report it. According to CBP, the report is made on FinCEN Form 105. CBP says a person who does not report it, or gives false information, risks having the money seized, and in some cases faces fines or prison.

An account in Georgia. FinCEN says a United States person must file a separate report (FBAR) if they have a financial interest in, or signature authority over, foreign accounts and the total value of those accounts is over $10,000 at any time during the calendar year.

What Georgian law says

Money remittance. Under the Law of Georgia on Payment Systems and Payment Services, a money remittance is a payment service (Article 13). Article 15 of the same law says only these may carry out payment services: a payment service provider registered by the National Bank of Georgia; a commercial bank, a microbank or a microfinance organization; or a person defined in Article 14 of the same law. The same Article 13 says the law does not apply to a cash payment made between the payer and the payee with no intermediary, or to a cash-for-cash exchange service that does not go through payment accounts. So we cannot say whether this law applies to any particular exchange. That depends on whether the scheme has an intermediary and how it is set up.
Currency exchange points. In a 2022 warning, the National Bank of Georgia says currency exchange points register with it, and that running currency exchange operations without registration breaks the law and may lead to liability, including criminal liability. This warning is about unregistered exchange points and does not mention this hand-to-hand scheme.

We read the text of the law on the Legislative Herald of Georgia (Matsne), in the consolidated version of December 17, 2025. We did not research what liability Georgian law sets for breaking this rule, or whether any of it applies to a person who only receives the money.

The risk people think about least: where the other person’s money came from

In an exchange, a person receives money without knowing where it came from. US government agencies warn about a scheme called a money mule: a person, at someone else’s direction, receives and passes on money that fraudsters took from their victims by deception.

The Consumer Financial Protection Bureau (CFPB) says some money mules know they are helping with a crime, and others do not know that their actions help fraudsters. The CFPB also says the result can be losing money, or even jail.
The Federal Trade Commission (FTC) says a person can get into legal trouble for helping move stolen money.
The federal money laundering law (18 U.S.C. § 1956) punishes a person who knows the money comes from unlawful activity and still carries out the transaction. The penalty is up to 20 years in prison.

So the law rests on knowledge. The risk is that the person does not know where the money came from and cannot check.

Warning signs that these agencies name:

A stranger asks a person to receive money and pass it on to someone else.
Someone asks a person to open a bank account at their direction.
Someone offers a “job” that involves sending money or packages.

If something goes wrong, who protects the sender

When a person sends more than $15 abroad through a licensed company or a bank, the law protects them. According to the CFPB:

Before payment, the company must tell the sender the exchange rate, the fees and the amount the recipient will get.
Generally, the sender can cancel a transfer within 30 minutes after sending it.
The sender can report an error for up to 180 days, and the company must investigate it within 90 days.

A hand-to-hand exchange has none of these protections. If the money is not paid out in Georgia, or less is paid out, or the bills are fake, the person has only what they can prove. And that person took part in a transaction that may turn out to be illegal.

Carrying a large amount of cash is a danger in itself. A post that says “I have $45,000, I’ll give it to you in Brooklyn” tells everyone that the person who wrote it has that much money at home or in a pocket.

A bank and a licensed company

A bank or a licensed company. The fee for this kind of transfer may be higher. In return, according to the CFPB, the sender has the rights listed above, and the transfer leaves a receipt and a record.
Papers that show where money came from. Pay stubs, a sales contract and a bank statement are examples of papers that show where money came from.
Splitting the amount. Under 31 U.S.C. § 5324, splitting an amount on purpose so that the bank does not file its report is a separate federal crime.

If a person is already involved and something looks wrong

The FTC and the CFPB name three steps for this case:

Stopping contact with the person who asked for the money to be moved.
Telling the bank.
Reporting to the FTC at ReportFraud.ftc.gov.

In Georgia, the National Bank takes reports about currency exchange without registration. Its hotline is 2 406 406.

Key terms

Plain meanings, not legal definitions. The Georgian word is in brackets.

money transmitter: a company or person that sends other people’s money. This kind of business needs a license (ფულადი გზავნილების განმახორციელებელი).
license: permission from the government (ლიცენზია).
money mule: a person who, at someone else’s direction, receives and passes on money that came from fraud (მანი მიული).
structuring: splitting an amount into smaller pieces on purpose so that the bank does not send a report to a government agency (თანხის დაყოფა).
wire transfer: a bank transfer (საბანკო გადარიცხვა).
remittance: money sent abroad (ფულადი გზავნილი).
cash: paper money and coins (ნაღდი ფული).

All words on one page: glossary (in Georgian).

Official links

This is our research based on official sources, and it is not legal advice. We offer it as it is, with no guarantee of any kind. The law changes, and every case is different. We are not responsible for decisions based on this page. A licensed attorney gives advice on a specific question.