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When Your Buyer’s Deposit Comes from Crypto: What Estate Agents Need to Know

1 September 2026

Anti-Money Laundering | Estate Agents | HMRC | Regulated Businesses

Crypto Is No Longer a Niche Risk in Property The 2025 National Risk Assessment states that property transactions appear in almost every money laundering typology and predicate offence,…

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When Your Buyer’s Deposit Comes from Crypto: What Estate Agents Need to Know

Crypto Is No Longer a Niche Risk in Property

The 2025 National Risk Assessment states that property transactions appear in almost every money laundering typology and predicate offence, and the property sector overall is assessed as high risk. This is nothing new; estate agents sit at the front of that chain and are consistently among the highest-risk sectors. As an estate agent or letting business, you are often the first regulated person a buyer speaks to, and the first person who should be asking where the money is coming from. In our previous article, Cash Buyers and Property Transactions: The Due Diligence Your Agency Needs to Be Doing, we looked at why funding routes that sit outside the mortgage system carry elevated money laundering risk.

In follow-up, our compliance team offers guidance on the growing risks with cryptocurrency and the importance of understanding where the money has been before it reaches your buyer’s bank account.

Crypto investments are no longer an unusual source of funds in a property purchase or letting. A growing number of buyers, particularly younger purchasers and those with technology or investment backgrounds, have accumulated wealth partly or entirely through crypto assets. However, by the time their funds arrive as a bank transfer attached to a property offer or deposit, the crypto element may be invisible unless your team asks the right questions.

There is a specific risk the regulators are concerned about. The Solicitors Regulation Authority’s (SRA) updated Sectoral Risk Assessment, published in August 2026, classifies crypto as an established transaction risk, noting that crypto assets may present an elevated risk where their legitimacy, ownership, or provenance cannot be established to a satisfactory standard. It highlights their cross-border nature, speed of movement, and varying levels of transparency, and singles out stablecoins as being frequently identified in money laundering typologies. While the SRA supervises law firms rather than estate agents, the underlying risk assessment applies to property transactions regardless of who is handling them, and HMRC draws on the same National Risk Assessment when setting its supervisory priorities.

Why This Matters for Estate Agents Specifically

HMRC currently supervises estate agents for AML, and the enforcement trajectory has been steep. HMRC issued 798 formal enforcement actions against estate agents in 2024-25, a 400% increase from the 157 issued in 2023-24. In just six months of that period, 170 penalties were levied against estate agency businesses, totalling £835,842. The most common breach is failure to register for AML supervision, but HMRC is increasingly looking beyond registration at whether controls are actually working day-to-day. Read our previous article for further information: AML Failures Catching Regulated Businesses Out: HMRC Penalties by Sector.

That shift matters for crypto-derived funds, because the policies, controls, and procedures (PCPs) most estate agents have in place were not designed with crypto in mind. A standard source of funds enquiry asks where the deposit is coming from: savings, inheritance, sale of a previous property, a gift. If the buyer says “savings”, and the bank statement shows a large balance, the due diligence box often gets ticked. But if those savings were built by cashing out a Bitcoin holding six months ago, the bank statement tells you nothing about where the money was before it reached the bank.

We covered the wider distinction between source of funds and source of wealth for the property sector in Source of Funds vs Source of Wealth: Where Estate and Letting Agents Are Still Getting It Wrong. Crypto-derived funds make that distinction sharper. A buyer who explains where a deposit is coming from by saying “I sold some Bitcoin” is giving you a source of funds answer. Source of wealth questions should identify how they acquired the Bitcoin in the first place, how much they originally invested, and whether the claimed return is consistent with market movements; these are the ones that actually tell you whether the funds are legitimate.

What HMRC Expects You to Do

The obligations are the same ones that apply to any high-risk source of funds, but they need to be applied with an understanding of how crypto works. In practice, that means several things.

Treat crypto as a high-risk indicator and flag any buyer whose funds derive wholly or partly from crypto assets for enhanced due diligence. This is not a judgement on the buyer; most crypto assets are obtained legitimately, but it must be clarified. Implementing a higher level of client due diligence reflects the characteristics of the asset class: cross-border movement, speed, varying transparency, and the difficulty of establishing provenance to a satisfactory standard.

When dealing with any form of crypto assets, your source of funds enquiry needs to go beyond the value shown in a bank statement. If a buyer has converted crypto into sterling before making their offer, the bank statement shows a deposit. It does not show what kind of crypto was held, where it was acquired, how long it was held, or whether the profit claimed is plausible. Those are the questions that matter, and they need to be asked and documented.

It is also vital to understand whether and how you can check the history of the crypto asset. Bitcoin and many other major crypto assets have publicly searchable blockchain records. If a buyer tells you their deposit came from selling Bitcoin, the transaction history can, in principle, be verified through a blockchain explorer such as blockchain.com. To do this, you will need wallet details or asset identifiers from the buyer.

However, not every crypto asset has this transparency, and that is itself a risk factor: privacy-focused coins and decentralised exchanges with limited records make verification harder and should be treated accordingly.

Stablecoins deserve particular attention, and several regulators and AML supervisors have highlighted them as an elevated risk. Because their value is pegged to a fiat currency, usually the US dollar, they are used heavily for moving large sums quickly and at low cost. That same characteristic makes them attractive for laundering, which is why the SRA specifically calls them out in its latest Sectoral Risk Assessment.

The Common Due Diligence Failures

At the Regulation and Compliance Office (RACO), the failures our compliance teams see most often in practice fall into a few recurring patterns.

The first is not asking the right questions. If your client onboarding form does not include a question about whether funds have at any point been held as or derived from crypto assets, you are relying on the buyer to volunteer the information. More often than not, unless asked, the client will not think to provide this information, because they do not think of cashed-out crypto as anything other than money in the bank.

The second is treating the question and response as binary. “Are funds from crypto? Yes/No” is not a completed risk assessment. If the answer is yes, you need to know what type of crypto, how it was originally acquired, how long it was held, what the original investment was, and whether the claimed return is consistent with how the market moved over that period.

The third is assuming that a UK bank account makes the funds clean. HMRC’s own position, consistent across its guidance, is that you cannot assume funds are legitimate simply because they sit in a UK bank account. The bank verified the deposit. It did not verify where the crypto came from before it was converted.

What Estate Agency Businesses Do Now

If your business risk assessment does not address crypto-derived funds as a risk factor, it should and must be updated. HMRC expects your risk assessment to reflect the risks your business actually faces, and any estate agency business handling residential sales or lettings is likely to encounter crypto-derived funds sooner or later. The 2025 National Risk Assessment and the SRA’s Sectoral Risk Assessment both identify crypto as a current risk in property, and HMRC will assess your controls against that backdrop.

Beyond the risk assessment:

Add a specific question to your client intake and source of funds process asking whether any part of the purchase funds derive from, or have at any point been held as, crypto assets.
Train your appointed MLRO (Money Laundering Reporting Officer), supervisors, and sales staff to recognise crypto as a high-risk indicator and to escalate any crypto-linked funding to the nominated officer before the transaction progresses.
Make sure your enhanced due diligence process includes the ability to ask for wallet details, transaction history, and evidence of the original investment where funds are crypto-derived.
Document your reasoning. If you conclude that crypto-derived funds are legitimate and the transaction can proceed, record why. If HMRC asks to see how you handled the matter, a documented rationale is the difference between a compliant file and a breach.

How RACO Can Help

Crypto-derived funds are one of several areas where the gap between what HMRC expects and what estate agents are doing in practice tends to be widest.

RACO’s Due Diligence and Risk Assessment service is specifically designed to provide that support and close that gap. We carry out the due diligence work, prepare documented risk assessments, and ensure that the records your business holds are proportionate, accurate, and defensible. Your team retains oversight; we remove the guesswork.

Alongside our due diligence service, we can support your agency with:

Anti Money Laundering (AML) Compliance Service: This support service has been designed to provide AML regulated businesses with an effective solution for the management and control of compliance with the Anti Money Laundering Regulations. Our service is an annual subscription that provides Businesses with ongoing support from our compliance team and ensures your Business has in place appropriate and compliant Policies, Controls, and Procedures (PCP’s) that are maintained by us.
Risk, Anti Money Laundering Guidance and Register Administration Service has been designed to provide Businesses and their Money Laundering Reporting Officer (MLRO) with a support function that ensures their regulatory and compliance obligations are fulfilled on an ongoing basis, and staff are provided access to ongoing advice as needed.
Regulation 21 Independent Audit. Our service provides businesses with a completely independent audit and ensures the review is completed and reported on in accordance with the regulatory requirements.
AML Training. Training staff on the Anti Money Laundering Regulations is a legal requirement. Your staff should understand (and be able to evidence understanding) how the AML rules and the processes the business has implemented to minimise the risk of money laundering.

Our compliance specialists provide practical, sector-specific guidance that enables regulated businesses to meet their obligations without hindering business operations. We work with businesses of all sizes and across all regulated sectors, tailoring our approach to each business’s working methods and risk profile.

Talk to our Compliance Experts

RACO works with businesses to create the necessary documentation and put the processes in place to ensure the business and its staff are thoroughly protected.

To enquire about our services and how we can service your business, call us on 0203 985 8550 or email us at info@regulationandcomplianceoffice.co.uk

For more on how RACO supports estate and letting agents, visit our Estate Agents and Letting Agencies sector page.

Speak to Our Compliance Team

To review how your agency handles crypto-derived funds, or any other aspect of your AML framework, call us on 0203 985 8550, complete the online enquiry form, or email us at info@regulationandcomplianceoffice.co.uk

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