Thailand Sees Cash Withdrawal Surge as AML Crackdown Freezes Over One Million Accounts

The Bank of Thailand has revealed that an unusually sharp rise in cash withdrawals in September 2025 was a direct consequence of expanded anti-money laundering enforcement that resulted in the freezing of accounts tied to online piracy and financial fraud.

Authorities explained that under existing anti-money laundering statutes, anyone convicted of laundering assets faces severe penalties, including prison sentences of up to ten years and fines ranging between 20,000 and 200,000 baht. In response to the intensified enforcement, many members of the public chose to withdraw funds and hold physical cash out of concern that their accounts could be restricted. This sudden shift in liquidity behavior prompted the central bank to reassure the public while simultaneously maintaining strict supervision over commercial banks to prevent illegal financial movements.

The unusual spike in cash usage was largely driven by a sweeping government campaign targeting mule accounts, which are commonly used as intermediaries for laundering illicit funds and supporting online scams. The Ministry of Digital Economy and Society, working alongside the Anti Money Laundering Office, broadened the criteria used to identify suspicious accounts. As a result, more than one million bank accounts had been frozen by early 2026. Officials viewed this aggressive intervention as essential to dismantling networks responsible for moving billions of baht linked to cross-border organized crime and illegal gambling operations. However, the sweeping nature of the enforcement created unease among legitimate business owners and consumers, who worried that their accounts might also be affected. This anxiety led many individuals to rely more heavily on cash transactions for everyday spending, temporarily moving away from the country’s widely used digital payment systems.

In anticipation of increased cash demand during both the Chinese New Year period and the upcoming national election in early 2026, the central bank has introduced a coordinated plan to manage cash distribution. To safeguard financial stability and prevent cash from being used to fund illegal political activity or launder money, commercial banks have been instructed to closely scrutinize large withdrawals. Any cash transaction of two million baht or more must now be reported to the Anti Money Laundering Office, and electronic transfers exceeding 100,000 baht are also subject to mandatory reporting. Regulators believe that these requirements will help detect irregular patterns that could signal the movement of unlawful funds, particularly during the sensitive election period. The authorities’ objective is to ensure that available liquidity reflects genuine consumer and business needs rather than serving criminal interests.

As part of a broader effort to strengthen the financial system, the central bank has also imposed stricter documentation standards for significant transactions, especially those involving foreign currencies and valuable assets such as property or digital currencies.

Beginning in late 2025, banks were required to conduct enhanced due diligence on incoming transfers from non-residents exceeding 200,000 dollars. These updated rules eliminate simplified verification procedures for high-risk categories, compelling financial institutions to confirm both the origin of the funds and the precise purpose of each transfer at the time of the transaction. By tightening controls over assets including gold and physical currency, regulators aim to eliminate vulnerabilities that criminals have historically exploited to conceal and integrate illicit proceeds. These measures form part of a larger strategic framework spanning 2024 to 2026, designed to improve the country’s resilience against increasingly sophisticated financial crime and cyber-related threats.

The recent volatility in cash demand highlights the challenge of enforcing strict anti-money laundering regulations while preserving public trust in the banking system. Although freezing more than one million accounts underscores the government’s determination to eliminate mule account networks, the resulting surge in withdrawals reflects lingering public concerns about access to their funds. To mitigate these fears, the central bank and the Anti Money Laundering Office have improved the appeals process for affected account holders, pledging to review cases within hours to minimize disruption for innocent customers.

Regulators are also introducing behavioral monitoring technologies and tighter reporting thresholds as part of a shift toward more proactive, data-driven financial crime prevention.

As Thailand moves through its 2026 election period, the effectiveness of these initiatives will depend on whether authorities can successfully curb illegal financial activity without undermining confidence in the nation’s banking and digital payment systems.

By fLEXI tEAM