why do Banks ask for income source for bitcoin sold payment

[el kaka22]

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 ?

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 ) nobody will ask me how I got it. So all countries have their own ways of regulating money transactions.

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[enhu]

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.

[kidoseagle0312]

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 ?

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.

[kaya11]

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.

[raven7886]

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.

[qwertyup23]

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.

[pawanjain]

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 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.

[BitcoinTurk]

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.

[Aptekary]

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.

[Kiweikoo]

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.

[Oceat]

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 ?

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.

[zhengqi]

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.

[voztata]

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.

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.

[St4yInTh3D4rk]

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.

[d1ceplayer]

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.

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.

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

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.

[GreatOrchid]

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.

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.

[Osarman]

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.

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.

[shield132]

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.

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.

[BitcoinHunt3r]

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 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.

[joshy23]

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 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.