In cash activity concerns, which statement best describes an Unknown Source of Funds?

• A. Cash deposit activity not consistent with or expected of customer
• B. Amount(s), volume, pattern(s), not commensurate with understanding of customer
• C. No apparent economic, business, or lawful purpose related to the source
• D. May or may not be part of structuring

Answer: (C)

The main idea here is identifying funds with no identifiable origin or justification. Unknown Source of Funds means you cannot determine where the money came from, and there is no apparent economic, business, or lawful purpose tied to those funds. That lack of a credible source is a red flag for potential illicit activity.

This option is the best description because it directly specifies the absence of any legitimate or explainable source for the funds. Other descriptions focus on patterns of activity or how the funds relate to the customer’s profile, or touch on structuring—factors that describe different AML concerns but not the fundamental issue of not being able to verify the source itself. When funds have no apparent legitimate source, it warrants heightened scrutiny, additional verification of the source of funds, and potentially reporting if the risk remains unresolved.