Bitcoin Forum

my cousin sold his bitcoin to a guy in Thailand and that person made direct payment to my cousins bank account in Singapore from his Thailand bank but now the bank in Singapore is asking my cousin to produce his income source and has freeze that transaction money in his account. my concern is does the bank have that authority to stop my cousin from taking money out from his account and give such reason or excuses ?
is there any legal solution ? is it possible to sue the bank ?

I think in Singapore they have regulations for crypto currency usage so if you don't have appropriate proof that where this crypto made from then you won't get your money back.

Obviously something suspicious has been flagged up, and as such the bank have frozen that transaction. It is likely that they are concerned regarding money laundering, which is why they are asking for your cousin to produce proof of his income and other such details. Unfortunately, this will likely all have been spelt out in the terms and conditions of the account your cousin signed up for - banks are generally well within their rights to do this. Your cousin's first step should be to contact the bank and try to ascertain exactly why the transaction was frozen, but if it was for suspected money laundering, then they will not unfreeze it until he complies with their requests for more information.

As an aside, this is why we need crypto - so someone faceless entity can't seize your money without repercussion.

If the transaction is between individuals and not with an exchange, how does the bank know that its related to bitcoin in the first place?

I suspect that the amount is too big here. Banks don't manually audit accounts, It's all automatic so whatever your cousin has been doing, it must've raised something.

They're probably covered when it comes to legalities. I don't think suing them would help. Why not just provide the source of income?

Under the Anti Money Laundering guideline, every country has set up a tolerance level based on transaction value. For example, in India every bank has a tolerance level of 1 million Indian Rupee. Anything above that amount automatically gets reported to the Government's AML committee. If the transaction value is not near to the usual volumes, bank can definitely ask for the source of the money and freeze the amount until they get a satisfactory answer.

I am sure, the amount of transaction is well above the tolerance level set up by the banks of Singapore and that's why they freezed the amount. Legal ways won't do much good. Rather try to prove the bank that the sold bitcoins were not obtained through illegal means. I believe bitcoin is legal in Singapore so if your cousin can prove that bitcoins are obtained through legal activities, you can expect some positive outcome!

In most cases, banks are firmly within their rights to freeze accounts where they suspect links to terrorism or other criminal activity. This is one of the dangers of selling BTC for international wire payments from strangers. It's possible the money your cousin received was stolen or otherwise connected to crime and your cousin has now been wrapped up in this mess.

The only course of action now is to document evidence that he was just innocently trading crypto, cooperate with the bank and the authorities in their investigation, and hope they clear him and release the funds.

Cross border fiat transactions are always riskier as it may trigger the flags which are related to money laundering. I guess lawyers from Singapore may help you better still I do believe there would be decent number of Singapore people here but not sure about their knowledge on legal issues. Better ask your cousin to contact lawyers in Singapore.

The received amount triggers the alarm. How much we are talking here?

Usually if a bank account doesn't always have a regular transaction or in such case that all of a sudden it received a sudden decent money then they will asked for some clarifications. Knowing Singapore banks, they are strictly regulated and no way will just freeze an account for nothing.

Aside from that, the bank transaction was made via cross border so definitely it increase the impact to the freezing of the account.

Just be nice answering to them. Giving excuses might just turned into worst.

They do that because of certain reasons such as money laundering and Bitcoin not being regulated yet is a soft ground for money laundering. Your Cousin should have known this before transferring the money to a bank account.

Another reason could probably be taxation. Maybe they want to find his source of income and know if he has been evading tax( this is speculation thou)

It all depends on your state and its attitude to cryptocurrency. If it was illegal there, the Bank had the right to freeze the account and demand an explanation. Unfortunately, this is a common practice of such behavior on the part of the state.

Usually large amounts of money will always be asked by each BANK, it is a procedure that is owned by each bank to avoid money laundry.
So in my calculation it is better for me to divide up some nominal money and it can make us comfortable in making transactions.

I guess the bank will not freeze one account if that account was not making a suspicious transaction. I am sure that his cousin receives large money so it will alarm the banks to investigate the account. Why not his cousin verify the transaction and tell the truth where he got that money so the bank can reopen his account? I guess the bank wants to clean up the money laundering and they are very concern with their customer. I think that is a legal solution for his cousin.

You have to ask them the reasons why they freeze your bank account.
My bank is crypto friendly so I cannot relate fully, if you have time, you can read some banking regulation regarding deposits and withdrawal transactions that involves crypto, if that money is clean, I believe they have no reason to hold that.

Maybe just comply with the bank requirement and be honest with every questions, hiring a lawyer to saw a bank is just making things complicated and for sure it's expensive, consider the amount as well, banks don't just freeze money without basis as their reputation is at stake and they might be penalize.

Just like what other posters have said, maybe something raised an alarm to the banks regarding the deposits that's why they have frozen yes. As far as I know they have the right to do it if anything suspicious regarding the originator or the receiver.

But I guess if you cooperate with banks and give them all the details then you can get back your money. No need to sue them, it will just complicate things. Talk to them and show proof that it's not a illegal or dirty money.

thank you everyone for your responses, all advice's taken and will guide him accordingly.

if my cousin did bitcoin transaction without exchange to that person from Thailand then is there any sort of proof for that bitcoin transaction done with that person ? any sort of ledger or digital receipt perhaps that he can produce from that transaction so banks feels it genuine bitcoin transaction and not illegal money or money laundering.

my other concern is why do banks need to know how my cousin got those bitcoin and produce source of income for getting that bitcoin.

Any transaction done between two persons in respect to bitcoin to me has no proof of any sort, not even a ledger or digital receipt. Even though there is any sort, the bank will not see it as proof. Advise, kindly review the above forum members suggestions and find the most suitable one for a guild. Exchange base transactions are preferable to avoid such embarrassment from the Banks next time.  

banks may require for anything.
if they can not prevent it at all they can try to delay receiving funds.
anyway, a reason could be the following: that guy who sent money to your cousin was a suspicious one and that's why bank stops the transfer.
the only way is to be honest with a bank if your cousin lies then sooner or later it will be revealed.
the best advice is to explain everything including negotiations about btc purchase deal (and attach dialogue screenshots).
just make it transparent for them

True, questioning the origin of the money we save in banks, especially in huge amounts, is a procedure that is applied in many countries. Provide evidence by way of asking for clarification from the sender of the money, the Thai person who bought bitcoin from the op's cousin, is a way that in my opinion will clear up the problem.

When you are trusting a third party for transacting huge amount of money then these things will happen.

I think it is just a normal thing to freeze your bank account when they found abnormal transactions on our account and you agreed those terms while opening your bank account so only way to get your money back is provide the details what they were looking for.

All Banks comply with their Terms and Conditions especially when it come to AML. In my country for instance having upto to 10Millionaire in a single transaction or its equivalent in other currency will attract such individual to proof the income source or to tender taxation records from previous months or years of the account existence. Actually, its very safe to use exchanges if such huge money is involve but OP case is different, no legitimate proof from OP that will make the Bank release the funds.  

Well, regulations in countries all vary from each other. For example its complete opposite in my country, if you send money from our country to our country like someone sitting right beside me sends me money they have to write an explanation of why they sent it, it could be absurd like "asdgasdgfasdf" and just send it and as long as it doesn't create red flags than it goes by, nobody checks all of it, only check the ones that raises red flags so most people write "other" or something like that there.

Nonetheless, if money comes to my account from another country it is literally allowed to get as much money as you want and it can't be questioned by law. You can send my account 2 billion dollars all at once (please do :D ) nobody will ask me how I got it. So all countries have their own ways of regulating money transactions.

Its not the first that had happen actually I have read some post in here which was far worse. I myself was asked by a local bank to present some documents about my source of income, luckily I have an online job for which I do in upwork. ITs going to be necessary for them specially if you unload huge amount of money which they don't normally see happening with your account.

That's the reason why I hate banks. Imagine We trust our money to them then they will hold our savings due to We need to submit our source of income, I tried actually to apply an open savings account here in my country then when I said that I'm a freelancer and crypto traders they declined me because they need a certification from the company or from the business if I am self-employed.

Just be transparent, any information that may lead to your crypto assets should only be known to yourself and even the banks should not have it. If they want some information then ask them if they are mandated to do so by the government- let them show some papers that truly it has to be a regulation by the government. If you are not so sure on what to do, then ask for help, a public attorney should do.

This is exactly what we say about a centralized market, it is full of strictly policies, actually they have every right to freeze the account since they are operating under the rules and regulation of their central bank which must have stated certain limit of money an account  can receive in a day without proof and anything above that must come with the proof that the source is genuine and legal.

The mistake he made was to have used one bank to receive the lump sum at once and since this has happened, all he need to do is meet his account manager and explained to the manager in details the source of the income, the manager will be best to advise him on way forward and letter required if there is any.

We are talking about large amounts of money being transferred to banks and it makes them doubtful about the source due to possibilities of money laundering or any illegal activity. Another reason is for auditing purposes but the former is usually the reason on why they ask it. They must confirm all transactions as genuine since they may also be held liable for any future negligence on their part assuming that the source of funds were illegal.

Given that bitcoin is on its embryonic stage when it comes to acceptance and legalization among countries, they are still doubtful and skeptical as they follow what is written on the law. It also depends on the country where you stay at as some may be lenient towards these transactions and others ask for stringent requirements and measures.

Banks never freeze an account or a particular transaction unless it's an unusual activity. Either the amount must be too big or the transaction remarks would be showing it as a crypto related payment or something. Yes banks do have the ability to freeze that particular transaction because crypto would not be regularised or legalized in your country. There are many such countries whose bank do so in order to prevent black money turning into white. I know this because my someone I know has faced a similar situation in the past which lead to his bank account getting frozen.

If I didn't know anything about this, Singapore tried to set limits on transactions with some regulations. Considering the basic objectives of taking various measures, such as having tax targets and preventing illegal money transfers, we may think that some regulations are necessary. But there is a fact that this situation is contrary to the goals and objectives of Bitcoin, in short, its vision. Probably the money will be available again after the tax payments.

It seems to me that this would be expected, because the government of all states will sooner or later put up different demands on cryptocurrency users, including taxing their activities.

It totally depends on the rules and regulations put in place by the country against crypto currency, if there's a law against crypto in the country, then I don't think you would be able to sue the bank because I think they are operating based on the jurisdiction of the law and there is nothing you can do about it, but if there is no law in place against crypto currency, then he should go ahead and sue the bank. The banks is always against crypto because it is a big threat to them and they know this.

You should let your cousin have at least read the rules and regulation of the bank about selling any cryptocurrency because the banks have the right to halt any process if the amount of the money is beyond to the expected minimum amount that a regular customer could take. And this is why the banks have to stop it because they are concerned about the AML law, that's why the banks have the right to ask your cousin that question.

If your cousin ever gonna produce a legal statement of his/her source of income, then there is no problem of taking that money but make sure that your cousin's source of income will match to the money that he/she's been taking.

Because they are obliged to respond to all suspicious transactions with money. On the one hand, it is terribly annoying that the state does not allow someone to dispose of their own funds. But on the other hand, various frauds with money can be committed with bad intent. Therefore, the Bank is simply obliged to react to prevent this.

Of course, the limit alarm placed on the account must have been triggered as a result of the number of zeroes he must have received.

Take for example, in my country, I can only receive 25000 dollars in my domiciliary account per day and anything that makes me receive any amount more than that, the accounts has already been programmed to freeze the account temporarily especially if it is not a business account, so I have to proof the source of income by providing sales document, invoices of goods purchase and so on but in this case of Bitcoin, I really don’t know if the bank will really recognize it since majority of them still frown at cryptocurrency.

Banks were regulated and working on certain terms so if you are doing huge transactions often then you won't be asked for any verification but sudden deposit of huge amount of money from international transaction will get you in trouble,you might choose the split trades or some other services other than bank transfers.But now you can only get your account back from your bank.

Backs are not decentralized and are not cryptocurrency exchanges that would not ask you for further proofs or income sources if you are transacting some big amount of money. This is just not possible. Every regulated body will do that because the transparency is important when it comes to money and banking system. You might not like banks due to this reason but it is one of the ways to prevent money laundering etc.

Doing big transactions frequently also will trigger another levels of doubts and verification. I guess world wide with all banking system, we must need to clear all types of KYC on very first huge value transactions. But, these regulations will be hated by all the people which will lead to easy adoptions of cryptos. It means banks are working "perfect" for encouraging bitcoin adoptions.

Very well said. The OP cousin’s money transaction in his bank account will not be freeze like that if the bank didn’t find anything suspicious. More than that, the best thing that his cousin to do is make contact directly to the bank and settle this down. Well this will not happen if there is no certain policies that have been met. Policies of the bank, something like the money transactions met a certain amount, it will automatically been reported or just freeze for a certain amount of time and will just proceed to it, if the owner of the account will comply to the requirements of proof need for that money transaction.

Even if you are making big transaction every time, you would be under the eyes of authority because they always correlate your income sources and the income you transact every time.

So yeah, this could get you in trouble. Cryptocurrency has made it possible to send the money anonymously from one place to another without being noted by the authorities and that is the reason why many countries do not allow cryptocurrency because they know it might lead to a menace in future.

The problem is that you get a big amount of money which raised a question: why? how? I think your bank account don't has history of big money transactions. Banks don't know if your get money from bitcoin exchange or not but they want to know how you got this money, what was source of it because they think you are laundering money and not paying fees. Better to solve that problem with bank but be very carefully to not get that money lost.

I heard friend of my friend get that experience too. And it is because on his tx says withdraw from bitcoin. I glad never got that experience because maybe some banks not allow their user use bitcoin or maybe something kind of that.

If that's a huge amount of money, banks can do that for security procedures, they need to comply with the laws regarding to money laundering, you need to provide proofs that you are capable to have that huge amount, from what I understand Singapore already have a good knowledge about crypto you just needed to provide information about the deals that your cousins have.

Transparency is very important in the financial market. This is what the cryptocurrency market is all about. This has actually given rise to a more secure way of making transactions across the glob.

The money is coded and could only be decoded by the recipient. Banks of course have to worry about their credit reserves as well and this is why before such big amount of transactions, they enquire about it. Even certain exchanges do the documentations.

What banks are doing, this is default reaction we all must accept. They have to behave like this way, its super natural. Definitely as you have just said that they are worried about the credits and money that is coming to them without any hesitation would may go somewhere else. It might be possible that costumers chose bitcoin over banks and thus they will be diminished. So don’t just worry, let them response in their own way.

In fact, as I understand it, every participant in a business in the financial sector is worried not only about his reputation, but also about the future business. But in connection with the global fight against terrorism and organized crime, new methods are being adopted for identifying intruders. Perhaps that is why now they are required to submit their documents everywhere.

This issue of your cousin regarding his bank account’s transaction money that as freeze by the government certainly have been found something like an unusual activity in that account. The Singapore’s Bank will not just freeze a certain transaction if they not find it suspicious. But well, it can only be resolve by your cousin. She/he is the one that can make things settle down. He just needs to comply what the banks requires to make process your cousin’s transaction money. Moreover, if there is no illegal doing or issues involve then this will end up all right and fine.

banks have this authority. In my country, banks have blocked the accounts of many people until these people file income statements, and this is causing problems for many people because most of the people in my country do informal business. This problem will worsen when involves bitcoin. how would people say that source of income come from bitcoin? so we need clear regulations on bitcoin


just deliver what the bank is asking

Policies need to be followed and policies are always in the favor of the state. The growing global corrupt elites have been busy raping the economies of the countries in every way possible and this has led to the creation of such policies which not only question your volume of money but how often you do that. Regardless of a good or bad image it is sending to the world, many countries have had horrendous penalties for financial frauds and scandals.

I agree on this, we can't blame the bank why they had to freeze your money maybe they think that very looks suspicious. We know the bank did not support cryptocurrency and they think that the money of your cousin was from money laundering or fraudulent. Anyway, if using cryptocurrency in your country is not prohibited then, there's no such thing to worry about. Just give them the right info. and tell the truth.

I think the bank got the right to freeze the account, as long as the authority find something suspicious they deserve to freeze the account and ask the customer to provide extra documents, I think your cousin need to cooperate, there will be a more heavy consequence if the person not cooperating, they will accuse your cousin for money laundering

If he provides evidence that the money is coming through bitcoin, and he has proof of the exchanges done, they might still not accept because most bank believe that any huge amount of money coming into the account should either be for payment of services or payment for product, I know that to him.

It was a payment for bitcoin sold but think of it, he must have exchanged a substantial amount of money too before exchanging it to BTC, except he was among people that bought BTC when the price was very low maybe $500 to $1000 but if we are talking about purchase around $3k  and sold it when price was $4k, he must have also invest big amount of money too, these are things they will put together to also ask him for the source of the income he used in investing heavily in BTC too before selling it out.

  For sure it is important to give all the information the banks whatever they ask you, we can take steps for the safety and it is all about the security of our money in banks, as there are so many people who scams and hacks even bank accounts but we will are bound by the government to give banks all the information they ask from us.

I think It's for Security reason.Because we saw since bitcoin transaction is untraceable so the money can be made from illegal works like kidnapping.So, banks want proof that you didn’t made any crime rather It's your valid income.My elder brother also faced the same problem couple of times, bank manager asked for the work proof after withdrawal money.