Bitcoin Forum

I use exchange websites to withdraw my bitcoins for fiat to my bank account. I wish to know that if in case the bank asks about the source of the income and source of bitcoins, what would I proof can I give them? I commonly earn from signature campaigns, freelance tasks and translations but giving them the complete details would be too much.


Has anyone ever provided proof or their source of bitcoins to any bank or legal organization? What would be the best way to prove it?

I really like to know the answer for this to I have been earning some bitcoin for my living through signatures,
What would I ever say or write in my resume if I ever tried to apply in some company to work as a regular worker?

I was thinking and discussing the same matter a few days ago. If my BTC reaches 5000$ one day then how can I sell my BTC to fiat and cash out my money?? The only possible solution was to sell the BTC in pieces and send it to many of my friend's accounts. Because if you sell all your BTC at once then obviously the government will ask too many questions about it.

There is nothing that links the account to your identity(at least in legal terms) and I doubt the revenue would accept signature campaign and faucets as valid and legal income.

You(and we all) are earning money that we don't legally have. A trouble if you want to withdraw for large expenses, but THEY won't be able to take it from you because you don't have it.

Solutions: withdraw slowly and don't have a lifestyle much bigger than you could have with your "legal" sources of income. Or gain much more by other ways, so your Bitcoins earnings could pass by without being noticed

This would become a problem if you were going to release a large sum of bitcoins for cash out since it is expected that banks would be suspicious on you because there are money launderers. I'm also thinking how can I prove to them clearly that those money I earned was from an online work related. You can have them provide some transaction logs or something but I doubt they will sit there on just that when we are talking about on large quantity. I think there would be a slight problem(maybe) when it comes to smaller value but still you can be a subject for clarification.

If you are really worried about getting caught by your government why don't you try to sell your bitcoin via localbitcoins or meet buyers personally near by you. However if you are not earning much than what other normal people earns then I don't think you will ever have to give info about your source of income.

This is really a difficult reason, because we have no way to explain this source of income most clearly. So it's best to split it into several parts, withdrawing each week or every month, based on the average income of a regular Youtuber or Freelancer normal, so it will be easier.

According to Indian law,
Misc. Income from internet or Online advertiser could work.
But maybe in case you could ask for website info or source of income. I always guide people to make at least one personal representative website which declare you as freelancer if one earn from sources like you mentioned.
Well being within 2.5L slab shouldn't make you fear anything from income tax except banks or if income is above that you could save yourself with periodic payment of taxes as every buy/sell routed through your PAN card via Unocoin, Zebpay or Coinsecure.

Not a problem unless bitcoin is not popular enough in your country. You can just tell them that you are an online freelancer and you have just closed a huge deal with a client.

One question in my mind though, if you personally bring cash to the bank and made a deposit, will they ask where did you get it? I don't think so. That's no different if you transfer online. Banks do like deposits.

If you tell them (bank) that one of your source of income is through Bitcoins, you might end up with somwone giving you a blank stare. I havent experienced this yet but whenever my brother or sister come to my house and ask me my source of income they give this blank stare like im a cracked pot.

Just tell them the truth, how you make your money online.

You may tell them you make your money through promoting other people product online in form of affiliate marketing.

Plus, you are doing some freelancing jobs to make extra income online.

what is it with you and the constant scaremongering?

of course it's your money and of course it's legally earned. you're not selling drugs here. it's a trickle of bitcoin.

if they care enough point them to a thread and pm them from your account or sign an address.

You're right about this your question because this causes a lot of problem in India acouple of months back where loose their money because they couldn't provide any proof.
I think the best way is to do some local sell of some of your bitcoin maybe through localbitcoin and accept the payment WU or MG while you also sell some through the use of exchange site and you can accept through bank account or get a bitcoin atm card.

I'm also thinking about the same thing bro. I wonder how to provide a legal proof to show you that you own a btc. But I don't think right now you need a proof to show you that you own a bitcoin, because we are exchanging money here freely.

the proof of owning a bitcoin is the ability to control it. that's all.

screenshots are enough to prove that you earned it or showing txid to known campaign addresses.

I think there will be no problem from using an exchange to convert your btc to fiat. Of course you will need to submit all necessary documentations for KYC and AML compliant. The only problem I see is that the exchange won't allow you to withdraw all your bitcoin in one transaction. They will put on how much you can only withdraw daily. So there would be a limit.

I think you must explain about the source of bitcoins to them, i don't think there are way to prove to them
because there are no indentity needed on bitcoins, how if you change the method withdrawal to fiat via
bitcoins debit cards that no needs verification when use them like uquid debit cards.

I will assume you cashout money that is considered as beyond the standard level. I have experience like that in our local exchange preferrably bank withdrawal options. My usual transactions with average amount never been questioned but when I tried to withdraw decent amount beyond the standard level (I think level 3 tier max. withdraw), they asked me where I got those funds. I answered them nicely but not to the extent that I will show them proof of works. I just showed them some "minor" things like the nature of works, websites (trading) and what is crypto all about and no questions asked later. I will try to dig the email and show to you what Im done.

Take note: They cashout the money first before asking the question so here it's not strict but I need to comply with the rules so I response nicely. In the first place, they have my identity so just respond to them and tell them the truth.

In my case, the local exchange that I used will initially asked you the source of your bitcoin before being approved by them. You have to submit some valid documents like passport or SSS Id. They will verify this and will make the decision to approved you or not. I was denied initially because they said that the documents I submitted was blurred and asked me to resubmit. So after a few weeks of back and forth email, they have finally approved it. And if I want to increased the maximum withdrawal, I have to submit another legal document. But I didn't bother because I only converted few bitcoin because the rest is it my desktop or paper wallet.

You do not have to create a story.  Just tell them where you got your bitcoins.  You have payments recorded on the blockchain and you also have the access to those wallet.  Why complicate things when you can just tell them the truth.  You are working online and your work is legit and not some illegal stuff.

Tell them that you are freelancing and accepting bitcoin as payment. Simple as that. Or you could add that you are joining signature campaigns in bitcointalk forum and you are being paid with bitcoin as well. Maybe you just add a few explanation what signature campaign is. I think if you stay to be honest with them and just be straight forward, you will eventually be approved.

Are you withdrawing large amounts($10k or more)? if you're withdrawing small amounts the banks won't ask you anything. even if they do ask you, you can tell them the truth or say you're a trader or bought bitcoins at $400 or something and you're cashing out profits now. ::)

Good to finally see everyone on this thread have not gone berserk. And for those people already running for cover when nothing is actually chasing them, check yourselves if you can't show proofs of promoting some projects in here. By the way, what could be earned through signature campaign and faucets can hardly attract bank attention except he is not telling us the whole story.  

Hmm that is an interesting and serious question. Till now i have only done some small amount of transfers from bitcoin to fiat currency, highest one was around 60 dollars. But i did not have any problem with the bank. I guess there is no problem, unless you make it. But honestly, i do not think that any bank will make you a problem, because they get their money from you, so why would they make you any kind of problem. And bitcoin is not illegal so :D .

Since it is mostly a freelance work you should just inform them as such,you really do not need to go into specifics about how you are earning your money and even when you are filing your income tax returns just provide these incomes too and you can get deductions on specific things and for all these details it is better to consult an expert

I never thought about this,i think it wont be an issue as the exchange i am selling the coins will be forwarding the money using NEFT transaction and the bank does not bother from where i am getting the money and if there is an issue it will be at the hands of income tax department as i have to file those earnings with them.

Not large amounts but since the bitcoin prices have increased and will continue to increase, this could become an issue. Large bitcoin trades might be questioned and then I don't know what exactly to prove as I don't have any paper proof to show them. I can just link them to this forum and explain from where the income has come in and then taxes would apply which is fine. If they go about questioning and asking further details I am not sure what to tell them then.

I am glad that they did not ask you further questions and I hope the same happens in my case too. I also trade on exchanges so I guess I can tell them the same.

Ler it be settled in your mind that by signature campaign, you are in effect advertising people's business and getting paid for it same way media houses do. You have all the proofs you'll ever need in here and blockchain even if Bitcoin becomes $1M, you earned it, so nothing stands in the way of your confidence. Trouble can only surface  f you start lowerng your head, looking the other way or agitated by such normal and simple security checks. Btw, want to believe  you're not less than 18?

Banks typically only care about sources of income if you're making a large amount or if they have to give out a loan, otherwise as long as you pay your taxes chances are they won't give a damn and just accept the money that flows into their accounts. Just make sure that you never dump a ton of money in all at once and space it out over time.
Key term; pay your taxes. Don't take loans.

Signature campaigns gives us a really good profit monthly it is one of the best way to earn bitcoin easily but there are also some ways bitcoin is the banks worst fear and i dont think they like bitcoin as a part but i guess there are some having a good partnership in bitcoin.

I don’t think it is such a huge issue what I mean is most of the time unless you are making a big amount of money then no one is going to do a great investigation effort, they are going to make a few questions and that will be it.

Actually I am also confused about this issue. Most of the money I earn from Bitcoin is from signature campaigns, so if the bank investigates that money, I really do not know how to respond. Maybe we need more evidence from the deals but it's too time consuming and hassle. I am waiting for a solution from you

What you say is absolutely correct. We do not have any information regarding your identity and your Bitcoin account so we can not prove that it is legitimate, and of course it is not legal. So your solution is the best solution. It will make the bank pay less attention to you

No i dont think the bank will ask you because earning bitcoins from signature campaigns and freelancing tasks will not be huge and bank would not give that much importance to this.May be if you are withdrawing some big amounts regularily then may be they can ask.

For now i have been doing this stuff already on which most of my earning here on bitcoin world is directly been credited to my bank account by the use of third party wallets which do have features on directly cashouting it directly to your card.Until now i didnt still experienced such issue about bank verification regarding on your earnings.If it does really require you then tell the truth that you are earning on that stuffs.

I will take screenshot of the transaction and show them. Maybe they will understand what I'm doing. In addition, I will withdraw small amounts of daily living expenses. You should not spend too much money for life because it will make the bank pay attention to you

just provide transactyion data, i saved all my log from kraken for example, in case they need proof i show them allt he sepa that i did, i don't think you need to provide more info about your bitcoin

i would just provide info about the fiat that i exchanged, my bitcoin amount should remain private, i don't know how they would react if you declare also your bitcoin total amount

in any casew you are not dealing with drug, bitcoin it's not illegal, you are safe from that point of view

I don't really know how your system works, but getting all the necessary data like the guy above me said won't be a bad idea. I see no reason to worry knowing it is legitimate and you can always get the source. Unless you are worried you don't want them to have a clue how you get your money but what are the odds?

I've never done this before because the bank is not asking me where am I getting my money, it is none of their business, that is why maybe they are not asking me what is the source of my income. They are going to ask you if you are just a random guy who would withdraw money from them, but if you are their regular customer then, they are just going to smile at you.

If you don't want to be asked again, then why not try to use ATM rather than withdrawing it in the bank directly, in this way, you could avoid to many questions if that is what you want.

I know the feeling mate. I have the same experience too I think about December last year. I just don't know how it was triggered because I used our exchanges here for years. Maybe Im doing a weekly withdrawals of the amount I can consider as not that small. I told them everything about some various method Im doing. Their response after that is not related anymore to the source of my bitcoin but they just suggest me to resubmit my ID verification and until now no such things like that ever happened again. I think this is just applied to bank withdrawals since other options are fine.

As you mentioned above, I see no problem if you will tell them about trades as it was not illegal as you are using a reputable exchanges.

Thank God every transaction online can easily be traced. Although it can be cumbersome. Since you know this can happen in your place, try as much as possible to always keep all your transaction details from all these your source so as to tender them should in case such matters arise. Don't be worried as there is no cause for alarm obviously.

How absurd! So you have with your eyes open been earning money illegitimately and yet you didn't quit?  The fact remains that Bitcoin is not untraceable, might be a hurdle tracing owner of an account, but not when the one who has the keys and history is showing them to you.

If some guys are panicking now that we're merely scratching the surface of Bitcoin, it is a wonder if they won't end behind bars as we land on the moon hopefully in the near future, for their inability to explain the source of their wealth.

If you have not experienced it you are going at some point because that is the way it works but since everything we are doing is legal then you have nothing to hide just tell them the truth and they are going to leave you alone very soon.

Yes , one of my friend is doing the same thing , usually he made earning if 0.5+ byc per month and sell online for the bank money
But the description for the sell and deposit money for him is giving by two methods simultaneously .
Trading : he shows that he is making money through buy and sell of assets online and make money .
Second is altcoin trading : Usually there are many assets and make buy and sell when price get rise much high .
In this way these two types of the description he made for the tax payment monthly .
So here I don't think it would be much hardworking , but here Is reality that you need to hire a lawyer or atleast make every detail map for yourself by spending the whole day .

It would only be a trouble if you want to withdraw large expenses, but they won't be able to take it from you because you don't have it.

The only solution that I see is to withdraw slowly and with low amounts.

Well if that were me i would say i am writer for the btc forum and i  am paid via bitcoin. Then i think it is managable enough to explain what btc is. Because that is mostly my answer to whoever is asking how i am making money while i am doing no effort. It is not a lie and definitely very true. For me that is just the most simple term i could say without them asking many questions on how i am earning.

I know this will be difficult for you to explain it to them, but you could cite it as a gift or loan or find out reading your country laws which items you need not declare. Once you come in the tax scanner boom you are gone, would advise you to have a word with your consultant and post this in your country local board here, so you shall find a more detailed information to your question.

I have been giving as short term profit from online income and i have given proof of the transaction id which i am sending through my wallet. till now no problem faced. or else you can also show as other way of income because their will be only incoming entry and you can even show your business entry.

I did not have any problem with exchange bitcoins to fiat currency so far, but i have heard that there is small fuss about income in my country. I hope this will sort out for better, but i think even if they ask me where do i get this money, now i know what to tell them and how. Thanks for information dude :D .

This community only as a place in the middle for that to implement the transactions and make the profit. When btc is paid for you and you sell btc to switch to Fiat or bank account, there will be a account tranfers to you. All is just like switching between acquaintances and does not need to explain or prove anything.

This is pretty easy and hard. The reason why I said it hard is because the government law of the country in reside may not approve bitcoin. However, most countries had sign bitcoin into their law and if country is not part of those countries you have a lot of home work to do. But I will advice you to use a legit/register exchanger, set up your account on your genuine name and have a picture copy of every transaction you do to be in case.

Why you should be complicated with the problem, of course it is your money that you can properly by promoting an online product or other work that its paying using bitcoin and not violate any law, tell them you get it well without deviating from law That exists, and you can provide proof that can reinforce if what is working is true

Absolutely,thats the best way left to escape from being targeted by governments for our bitcoin earnings.Just sending small amounts of BTC to different accounts to cash out.Well,my earning has not reached that much big and so i don't have such problem now.Our government has already asked all banks to give details of persons whose accounts have more than $1500 transaction for taxing purpose.So in future,i will use the above mentioned option.