Cashout crypto with source of funds but not matching blockchain history

[solotisorin]

I have BTC that I bought a few years ago on a CEX using my bank account. I withdrew those funds to my personal wallet, and since then, I have moved the BTC, bought other cryptos, spent some, and also received BTC from other sources. Now, I have more BTC than I originally bought with my bank, and it's mixed with funds from different origins.

If I want to cash out and my only proof is the original purchase with my bank, could this be a problem? Would the exchange or bank ask me to justify why my wallet balance and activity don’t match the original withdrawal transaction?

 

[Martin Everson]

If I want to cash out and my only proof is the original purchase with my bank, could this be a problem?

Depends where you are cashing out and their own compliance rules. Compliance varies from bank to bank and country to country. What they may ask may even be personal to your situation, passport, KYC etc etc. There is no one size fits all when it comes to compliance.

Would the exchange or bank ask me to justify why my wallet balance and activity don’t match the original withdrawal transaction?

Your best to ask the target bank ahead of time. They will be best to answer this. If they are a crypto friendly bank maybe they have a faq page you can read.


P.S What you should not do is send funds from crypto and wait for them to reach out to you after the fact especially if amount is large.

 

[JackofAllTrades]

Avoid known KYC SOF train wrecks like Coinbase. Check the reputation of the exchange for freezing accounts on their own initiative. If the bank is a problem, they usually let you know the first time you try to transfer from a crypto exchange however many banks don't care. Don't put all your eggs in one basket. If an exchange or bank tries the SOF gambit, lawyer up and turn the tables on them since they almost never have any proof to back up the claim that the crypto is tainted. The big exchanges have bespoke versions of chain analysis software so put the onus on them to prove something is amiss.

 

[youngbilly]

Avoid known KYC SOF train wrecks like Coinbase. Check the reputation of the exchange for freezing accounts on their own initiative. If the bank is a problem, they usually let you know the first time you try to transfer from a crypto exchange however many banks don't care. Don't put all your eggs in one basket. If an exchange or bank tries the SOF gambit, lawyer up and turn the tables on them since they almost never have any proof to back up the claim that the crypto is tainted. The big exchanges have bespoke versions of chain analysis software so put the onus on them to prove something is amiss.

But it depends how much it will cost to turn the tables on them.