why do Banks ask for income source for bitcoin sold payment

[DeskJob]

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 ?

[zhekinsp]

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.

[o_e_l_e_o]

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.

[OmegaStarScream]

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?

[avikz]

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 ?

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!

[exstasie]

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 ?

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.

[wuvdoll]

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.

[harizen]

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 ?

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.

[JeromeTash]

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)

[Slark]

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.

[gilangIDR]

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 ?

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.

[maydna]

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 ?

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.

[Natalim]

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.

[Jating]

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 ?

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.

[DeskJob]

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.

[XCANA]

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.  

[Noa_Amable]

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 ?

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

[emberbekas]

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 ?

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.

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.

[Thanasis]

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 ?

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.

[proTECH77]

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.