Anyone has experience with audits?

[cats]

Suppose you are an EU resident and have BTC from +10 years ago. Value is enough that you could retire but without being on the Swiss private banking league (you would need another 2x or so to have better margin). Coins are obviously of legal origin but you have no KYC buy tickets from regular exchanges. You got paid in BTC back then from participating in forums for instance, most of it would come from here. Some amounts were sent back and forth in now dead exchanges. You can point some of them to the payment addresses used for the payments and transactions but some are missing. The random ancient altcoin mining is also there but amounts are irrelevant. The source of funds is incomplete.

In this situation, what I've heard is that you should get your wallet audited. That is, you should run it through one of those firms that scan your addresses (obviously, you send the public addresses, not the wallet file) and if all is good then you present this to a bank of choice, which ideally you want a solid private bank, but if you are not rich enough you will need to find some EMI. You also want a country that will accept your source of funds.

My question is, has anyone done this process of audits in this context? How did it go?

Also, is there a way to know in advance, what countries and banks would be ok with it? I mean imagine you do this whole process, then show up in country X, and after spending half a year there to gain tax residence, the funds get rejected by either the bank or the taxman.

While getting your coins KYC'd isn't great, since it's really a lottery as you have no control of who owned the coins that you got sent and thus those address scanners could pick some blacklisted stuff, what else are you supposed to do? It's just useless 0's and 1's if you cannot use them, and at this point imagine you really need to use these funds. So im looking for solutions. Of course, if having blacklisted stuff could put you in trouble, perhaps it would be better to just forget about this money, but im assuming there is always a reasonable solution. Most people want to pay taxes, but not end up in trouble by being pioneers of this technology and having coins that come from third parties and not Coinbase. And so you never know if in previous hops before you got these coins, someone used some to by weed on some website on something, and then you get audited and have some of these coins, even if a small amount, and it shows up on the audit. What then? From what I've heard, this is not a big problem, but you never know. It doesn't really sound great, but I want to do everything legally and this seems like the way to do it, but I want some guarantees first.

If anyone has experience, ideally being an EU resident and staying within EU zone, then please let me know, as well as anything else I should need to know. I would only move outside of EU if the money justified that, a 4x from here or so, which I don't expect in years. And even then, im not sure I would be happy in some dodgy place that's too foreign.

 

[uplana]

It’s not that difficult, 10 Bitcoins at the current price give you around $1M USD.

You can indeed have a firm specialized in such matters audit them. We've had similar threads on the forum before with great answers.

What do you plan to do with those Bitcoins now? Exchange them for FIAT just to reinvest in paper assets?

 

[daniels27]

Does your country require any sort of reporting of either the transactions or the holdings? Is there any tax due on either mining or trading in your country?

How quick do you need to off-ramp what amounts? IMO 1M per year is normally no problem without any documentation if done properly. I know people who did even much more without banks having issues. And for nomads, governments aren't that interested neither.

 

[Meta]

Also, is there a way to know in advance, what countries and banks would be ok with it? I mean imagine you do this whole process, then show up in country X, and after spending half a year there to gain tax residence, the funds get rejected by either the bank or the taxman.

Some "audit providers" would have partnership with a specific bank. Meaning that bank certainly accepts their audits. Use those if possible, otherwise it's literally what you said: you go through the process, spend time, funds may get rejected. Don't expect a random non-crypto friendly EMI to bother understanding your crypto lawyer reports.
Regarding other questions, there are a lot (not one or two, a lot!) of similar topics in the forum. You may want to find and read them. Good luck.

 

[Martin Everson]

In this situation, what I've heard is that you should get your wallet audited. That is, you should run it through one of those firms that scan your addresses (obviously, you send the public addresses, not the wallet file) and if all is good then you present this to a bank of choice, which ideally you want a solid private bank, but if you are not rich enough you will need to find some EMI. You also want a country that will accept your source of funds.

I wouldn't do it as what happens if the coins are found to have passed through Al Qaeda funders, stolen, scammed etc. There is often an obligation to report suspected terrorist activity etc. Depending how deep the analysis they could find tainted coins. Also it may not help with a bank that has a strict no crypto funds policy even if you present an audit report. I am not saying it is useless but unless you are sure the auditor is not gonna screw you over if in the unlikely event something serious is found then think hard if you want to go down that path.

Also, is there a way to know in advance, what countries and banks would be ok with it? I mean imagine you do this whole process, then show up in country X, and after spending half a year there to gain tax residence, the funds get rejected by either the bank or the taxman.

You just need to ask the bank in advance. If all goes well then transfer only a portion to the bank to test the water and then the remainder later if all seems ok.

 

[JackAlabama]

Suppose you are an EU resident and have BTC from +10 years ago. Value is enough that you could retire but without being on the Swiss private banking league (you would need another 2x or so to have better margin). Coins are obviously of legal origin but you have no KYC buy tickets from regular exchanges. You got paid in BTC back then from participating in forums for instance, most of it would come from here. Some amounts were sent back and forth in now dead exchanges. You can point some of them to the payment addresses used for the payments and transactions but some are missing. The random ancient altcoin mining is also there but amounts are irrelevant. The source of funds is incomplete.

In this situation, what I've heard is that you should get your wallet audited. That is, you should run it through one of those firms that scan your addresses (obviously, you send the public addresses, not the wallet file) and if all is good then you present this to a bank of choice, which ideally you want a solid private bank, but if you are not rich enough you will need to find some EMI. You also want a country that will accept your source of funds.

My question is, has anyone done this process of audits in this context? How did it go?

Also, is there a way to know in advance, what countries and banks would be ok with it? I mean imagine you do this whole process, then show up in country X, and after spending half a year there to gain tax residence, the funds get rejected by either the bank or the taxman.

While getting your coins KYC'd isn't great, since it's really a lottery as you have no control of who owned the coins that you got sent and thus those address scanners could pick some blacklisted stuff, what else are you supposed to do? It's just useless 0's and 1's if you cannot use them, and at this point imagine you really need to use these funds. So im looking for solutions. Of course, if having blacklisted stuff could put you in trouble, perhaps it would be better to just forget about this money, but im assuming there is always a reasonable solution. Most people want to pay taxes, but not end up in trouble by being pioneers of this technology and having coins that come from third parties and not Coinbase. And so you never know if in previous hops before you got these coins, someone used some to by weed on some website on something, and then you get audited and have some of these coins, even if a small amount, and it shows up on the audit. What then? From what I've heard, this is not a big problem, but you never know. It doesn't really sound great, but I want to do everything legally and this seems like the way to do it, but I want some guarantees first.

If anyone has experience, ideally being an EU resident and staying within EU zone, then please let me know, as well as anything else I should need to know. I would only move outside of EU if the money justified that, a 4x from here or so, which I don't expect in years. And even then, im not sure I would be happy in some dodgy place that's too foreign.

theres no reason to get back into the banking system. If all clear just convert daily living expenses and be happily retired.
banking adds a lot of stress these days as they are like a gestapo force breathing down your neck.

 

[cats]

theres no reason to get back into the banking system. If all clear just convert daily living expenses and be happily retired.
banking adds a lot of stress these days as they are like a gestapo force breathing down your neck.

What do you mean? You cannot pay for anything with BTC, at least anything relevant. And even if you could, since you don't know the source of your funds, and the person or service you pays to will probably end up sending it in an exchange, you could be in trouble. This is the problem with BTC, you do nothing wrong, but anyone can send you coins, and in the small chance they are tainted and show up in some analysis software when you deposit them in an exchange or the person you send them to sends it on an exchange, now suddenly you are liable of holding these coins and you have a problem. This situation incentives people to not get their funds taxed, since who wants to play this gamble?

Even if you convert small amounts for fiat, you are doing so in an exchange that runs every single satoshi through analysis software, so every transaction is a lottery. And so you send this small amount and some day turns out it was tainted, and now they ask you about it and will ask where is this coming from. Why do you have this money if it was never reported. Also EU hates crypto by default, so it's not a great position to be in. You either fully disclose funds or stay off the grid, but then again, there is no use staying out the grid as it stands. If governments gave a solution to people in this situation, a lot of people would simply pay taxes and be done with it, but what options do they give them?

I wouldn't do it as what happens if the coins are found to have passed through Al Qaeda funders, stolen, scammed etc. There is often an obligation to report suspected terrorist activity etc. Depending how deep the analysis they could find tainted coins. Also it may not help with a bank that has a strict no crypto funds policy even if you present an audit report. I am not saying it is useless but unless you are sure the auditor is not gonna screw you over if in the unlikely event something serious is found then think hard if you want to go down that path.



You just need to ask the bank in advance. If all goes well then transfer only a portion to the bank to test the water and then the remainder later if all seems ok.

Yeah, this was my point. And so you ask yourself, what's the point, what would you do? Just forget about this money? It's not fair, but what can you do?