A client of mine gave me cash for a load of barn wood the other day. I now hold in my hands actual proof that he deals in cocaine, therefore I'm obligated to turn over the cash to my bank so that they can inform the proper authorities about this drug dealer. With that, I ask: At what point do you stop acting as an exchange and become policemen?
~Bruno~
You're not bound by AML/KYC requirements unless you're a reporting entity providing a financial service as defined by the relevant legislation in your country or a non-financial service to which those requirements apply (lawyers, accountants and jewellers have recently become "reporting entities providing a non-financial service" in Australia).
While
you don't have any AML/KYC obligations, your bank does and they could actually freeze your account pending verification of your identity and proof of the source of funds if they have reason to believe the transaction is "suspicious".