Cashing Out Thousands of Bitcoin

[Crypto Bull]

I believe every country has a reasonable threshold for a balanced account to avoid arousing suspicion from local financial regulatory bodies. Banks may inquire about your occupation and estimate your income, but if the assets disclosed exceed $10 million, I believe it would draw the attention of the IRS.

Gradual withdrawals are a simpler way to steer clear of scrutiny. If you're earning your money legitimately, I think you should be able to explain it well, and there shouldn't be any grounds for legal repercussions during an audit.

If you have 5000 coins from 2011 you may have spent only 5000 to get them.

If you held them till now and want safer investments you almost certainly can prove how you got them back in 2011.

They are worth 130 million. You have zero need to hide your wealth from the government assuming it is a quasi legit country..

Mixing and hiding shit at these levels do not make sense.

Just keep cashing at a steady pace and buy bonds and some stocks. Also you need legal advice at this kind level.

This is exactly what I thought. But in the meantime, I may still have issues because cashing out even 100k at a time may arouse suspicion and cause friction.

As there is now way that you can withdraw that amount of money without raising red flags regardless of the country in which you are living, also it does not make too much sense to sell all of those coins and then think about what to do with that money when it is already invested in bitcoin, so at most I would try to withdraw 10% of that amount with the precautions I mention above in a process that most likely will take months, as going from earning a small amount of money to a fortune will without a doubt bring a lot of attention to yourself, and you will have to be ready to explain the source of those funds over and over again.

One of the reasons I would cash out that amount of Bitcoin would be to 'rebalance' my investment portfolio and mitigate risk, even though this would cause a taxable event, and would be a high price to pay.

Also, Bitcoin is not cash. It's hard to buy things with Bitocin directly as opposed to cash. That's why I would want most of my assets in stocks, bonds and cash.

Why would anyone want to cash out that much money? What kind of purpose can that be used for?

To rebalance my investment portfolio in order to mitigate risk (invest the proceeds into stocks and bonds in my brokerage accounts), and to have that money in the 'system', which I can readily liquidate to make purchases as needed.

I can't really imagine a situation like that, but I think that such a huge amount of money calls for an OTC deal. Just after googling a bit, I can see that some major companies, including Coinbase, have OTC desks for big cashouts, so I would probably contact one of those, learn how these things work and do it like that. This way I wouldn't negatively impact the market, I wouldn't have to wait forever for my deal to be done, and I'd establish useful professional connections, I guess.

I've heard OTC desks mentioned a lot. Must be how the rich liquidate their cryptocurrency holdings.

5000 bitcoins, or $100 million dollars is sure alot of money, but I personally do not see any reason why such a huge amount of money must be withdrawn ones, to avoid problems, I personally would advice the any individual with such amount of money to withdraw, dived the withdrawal into several thousands of dollars, the person could withdraw $50,000 every week until the entire $100 million dollars is completely withdrawn..

The above approach will also help make sure that the sell off does not have much negatively impact on the market in general, but even if it does, this is still not as important as withdrawing the money to your private bank account, weekly withdrawal of $50,000 will ensure that you do not end up in some problems with regulatory bodies.

In NYS, that's called "structuring", which is a punishable offense.

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[NeilLostBitCoin]

What would happen if you suddenly sent a hundred million dollars to several banks/financial institutions? Would the IRS be immediately notified? Would your accounts get frozen? How do you avoid this?

This is the problem that I want. Of course, the IRS would be immediately notified. But firstly I wouldn't withdraw it at once to avoid this problem. And this could put you in danger since they know you once you put it in your bank. So what if you need the money badly as soon as possible? The only way I can do this is with the help of financial mentors or attorneys. They know how to bend the laws to minimize your tax.

[LoyceMobile]

The only way I can do this is with the help of financial mentors or attorneys. They know how to bend the laws to minimize your tax.

It may be worth moving to a different country, or set up some shell company to avoid taxes. That's what rich people do, right? Paying taxes is for poor people.

[Crypto Bull]

~snip~
No snarky answers, please. The above are only hypothetical examples. I don't own 5000 Bitcoin. Not even remotely close.

Then why the question at all?

Curiosity. Also, I own a good portfolio of cryptocurrencies that may be worth a lot more in the future. I seriously doubt it will reach 130 million, but even if it reaches a fraction of that, it's good to know how to liquidate some of it.

[coolcoinz]

Why would you want to sell everything right now? If I had that much money I'd first think of something that I need. I'd run out of ideas after 10 m probably.
What would you do with that much fiat money? Why would you want to keel that kind of money in an inflationary currency.

I can tell you what I'd do with 100 m in bitcoin.
Sell 1m right now to start spending on the things I need. Keep 99m in bitcoin for as long as I can.

3) What would happen if you suddenly sent a hundred million dollars to several banks/financial institutions? Would the IRS be immediately notified? Would your accounts get frozen? How do you avoid this?

Yes, the IRS is notified even if you transfer 100k USD to a bank account. Above a certain amount bank has to send reports and in the EU it's probably something like 20k EUR, but I might be wrong since they're sometimes changing it.
Accounts don't get frozen just like that, but the bank would probably contact you to ask about it.

[milewilda]

If I own that much, I'd probably register to as many exchanges as I can just to cash them out. But I'll do it with small amounts until I ran out of it if that's the plan to sell all of it.

But first, look if there's an OTC market where you can go. It's for sure going to ask you some important matters and will certainly ask for KYC. But do you have the choice?

You want to sell it and it's like you've got few options to do that. Although you can also check P2P for it, so that means like canvassing all potential markets and methods.

To avoid alert from the bank, don't do like a million a day or learn how much your bank allows not to flag you with your transactions.

There's no way that you could really be able to do bulks cashout when it comes to this knowing that there would really be tons will really be trying out to get a hold of you specially on verification and with some taxing issue
on which we know that they would really be that eager on trying out to get some big slice with the money you do have. Tending to go beyond with those maximum limits on which your bank account could hold?
Expect that  bank would really be calling you out on this regard or even just simply transferring those 5k coins on an exchange would definitely be raising up with those concerns. So the best thing to be done
in correlated to this is to cash out on  gradual manner and it would not really be creating that kind of problem but of course it might take for sometime but actually i could really be able to handle out such hassle
as long i do keep on cashing it out. How i wish that i do have this kind of problem,eh?  

[bocyaj]

First why you need to cash out the huge amount of dollar from the bitcoin,bitcoin is the treasure which give you huge gift anytime.To get the treasure,the most important thing is you need to hold all the bitcoin from your earning.Because we all know it’s hard to buy the huge amount of the bitcoin.If you are doing the real job,it’s good option to do the saving of the bitcoin in your wallet.Because after the month you can earn the income from the regular job.It’s better option to hold all your saving in the bitcoin.

[darkangel11]

They are worth 130 million. You have zero need to hide your wealth from the government assuming it is a quasi legit country..

135 to be exact

Mixing and hiding shit at these levels do not make sense.

Makes a lot of sense if you're a libertarian living in a socialist country where they can steal your money. Ask Canadians who were collecting money for truckers if they feel safe while their government steals their hard earned money.

Just keep cashing at a steady pace and buy bonds and some stocks. Also you need legal advice at this kind level.

Sell your bitcoin so your government can tax you and then give them a loan by buying their bonds. That's the last thing I'd do.

Let's speculate for a while.
I have 135m and I really hate bitcoin and want to spend all my coins.

First thing, I'd move to a country with no bitcoin tax like El Salvador or Germany.
Then I'd try to look for companies that would take my money directly and try to get expensive real estate, maybe buy a hotel, or invest in one. I'd put money in local businesses like restaurants, pubs, buy a part of the beach, or some other local attraction, like a ski resort, or a lake. I wouldn't turn my coins into fiat, that's just dumb. Fiat is inflationary and taxable and requires a third party custodian.
I might open a few bank accounts and put a million on each, just as a backup but most of my wealth would be in physical form.

[ZAINmalik75]

First why you need to cash out the huge amount of dollar from the bitcoin,bitcoin is the treasure which give you huge gift anytime.To get the treasure,the most important thing is you need to hold all the bitcoin from your earning.Because we all know it’s hard to buy the huge amount of the bitcoin.If you are doing the real job,it’s good option to do the saving of the bitcoin in your wallet.Because after the month you can earn the income from the regular job.It’s better option to hold all your saving in the bitcoin.

Sometimes we need to be ready for few things in real life even I personally also not in favour of doing things like these like sell my all portfolio into one time because this can create mess-up for me with I can't hold this big amount and if I try to have this in my bank then surely I have to give them proof of earning and many other details which are not right.
Just because of this all need to stay calm and do this all in instalments or doing from different places is also good even these all are just views in reality have no heart to cashout this all and live in fear of theft or many other things which can happen to me or family after owing this huge amount of money because if I will keep this in bitcoin then I am secure and surely living freely without any problem.

[Captain Corporate]

If we are talking about just "guesses" and situation that is not even real, I would say cash out by the 100? If you had 5000 bitcoins, you would tell that to a banker, and they would forward you to their manager and that person to his manager etc etc. No banker would be stupid enough to just accept it themselves, they would be in big trouble if you deposited that money and didn't use a higher up in ranks, that person would all likely be fired as well. But if they forward you to highest that cares (obviously not the CEO, probably branch manager of that bank store) then I would guess that its going to be possible for you to end up with a great help, you will use whatever, could be coinbase, and then slowly take that money out one by one, and they will store your money in the bank carefully.

[jossiel]

You want to sell it and it's like you've got few options to do that. Although you can also check P2P for it, so that means like canvassing all potential markets and methods.

Nah, there is not enough liquidity when it comes to p2p platforms.

Yeah, but maybe for a couple of grand can fill that up.

you can also check P2P for it, so that means like canvassing all potential markets and methods.

What is P2P? I keep hearing this. I could do a Google search, but I'm lazy right now.

You trade with other users on a platform like in Binance P2P.

If I own that much, I'd probably register to as many exchanges as I can just to cash them out. But I'll do it with small amounts until I ran out of it if that's the plan to sell all of it.

But first, look if there's an OTC market where you can go. It's for sure going to ask you some important matters and will certainly ask for KYC. But do you have the choice?

You want to sell it and it's like you've got few options to do that. Although you can also check P2P for it, so that means like canvassing all potential markets and methods.

To avoid alert from the bank, don't do like a million a day or learn how much your bank allows not to flag you with your transactions.

There's no way that you could really be able to do bulks cashout when it comes to this knowing that there would really be tons will really be trying out to get a hold of you specially on verification and with some taxing issue
on which we know that they would really be that eager on trying out to get some big slice with the money you do have. Tending to go beyond with those maximum limits on which your bank account could hold?
Expect that  bank would really be calling you out on this regard or even just simply transferring those 5k coins on an exchange would definitely be raising up with those concerns. So the best thing to be done
in correlated to this is to cash out on  gradual manner and it would not really be creating that kind of problem but of course it might take for sometime but actually i could really be able to handle out such hassle
as long i do keep on cashing it out. How i wish that i do have this kind of problem,eh?  

We're all wanting to have this kind of problem. LOL

But you're right about that the bank will certain take notice of it when you do that often times. The right strategy is to do it gradually just as you've said.

I wonder how many from the forum members did really experienced this kind of a not so problematic - problem.

[Lucius]

Curiosity. Also, I own a good portfolio of cryptocurrencies that may be worth a lot more in the future. I seriously doubt it will reach 130 million, but even if it reaches a fraction of that, it's good to know how to liquidate some of it.

If you are referring to altcoins, then you should know that their value only goes down with time in most cases, and most of them even fail completely. However, some will certainly be worth much more than they are worth today, but such an investment is actually in a way gambling - the only question is how much money you have that you are ready to throw into such a game.

As I already wrote, how to "spend" cryptocurrencies in one way or another is a much smaller problem for me, and you should focus more on how to prevent someone else from spending them instead of you, if you understand what I mean


I also recommend that you read the unofficial rules of the forum - especially rule 32.

[zasad@]

How would you go about cashing out very large sums of Bitcoin, or other cryptocurrency?

A hypothetical example:

You were fortunate to purchase five thousand Bitcoin, when it was only pennies a coin, and it's now worth a whopping $130,000,000. This is now sitting in cold storage in your digital wallet, and you want to cash out 100 million usd.

1) Are Coinbase and Gemini your only convenient options? Will they be able to cash out such a large sum, and send the proceeds to your financial institutions without issues?  

2) FDIC insurance only covers up to 250k per bank account. So, you would need more than four hundred accounts in order to cover all 100 million dollars. Is there a better way? Can you just send all 100 million directly to your Vanguard brokerage account? How do the ultra-wealthy do it??

3) What would happen if you suddenly sent a hundred million dollars to several banks/financial institutions? Would the IRS be immediately notified? Would your accounts get frozen? How do you avoid this?


No snarky answers, please. The above are only hypothetical examples. I don't own 5000 Bitcoin. Not even remotely close.

If you don't have that many bitcoins, then why ask such questions?
Why immediately legalize 100,000,000?
There are many jurisdictions in the world where you can legalize bitcoins and earn small taxes, but this will be done in stages so as not to attract the attention of the tax authorities. But sometimes it is better to resolve the issue of citizenship and tax residence first.

[justdimin]

You don't want SWAT team breaking down your door on you while you have some good looking bae with you enjoying some movies together, don't withdraw all your money from Bitcoin into your bank account, the next thing that will come to mind is you are into fraud and you will be taken in for questioning.

Even whales don't do this, they only move money into their bank account when they need it, and they will not move millions that could raise some suspicion, I won't dare move more than $20,000 into my bank account, that's if I ever need that much money instantly, anything more than this will raise some suspicion over my account and I could be on watch.

If you have something you want to build that will cost a lot of money, intentionally slow it down, build it with time, and do not prove you have all the money in the world by doing it instantly, you are endangering your safety too, off the bank record, they have your home address and they know how much you have in the bank.

I do not think that SWAT team would knock down your door. First of all if you are not in the USA then you are not going to get SWAT team breaking down your door to begin with, that's just an internet meme that people does but not the reality, they only do that in the USA and only after getting clearance as well, not like they can do it in a second, they do not have SWAT teams all around the nation ready to knock down doors in a moments notice.

But, it is even harder if you are in another nation because in that case CIA is the only one that could handle it, FBI looks within, CIA looks outside, and even CIA would just take notice and note you down but do nothing right now. So you can only care about your own government.

[Texac]

~snip~
No snarky answers, please. The above are only hypothetical examples. I don't own 5000 Bitcoin. Not even remotely close.

Then why the question at all?

Curiosity. Also, I own a good portfolio of cryptocurrencies that may be worth a lot more in the future. I seriously doubt it will reach 130 million, but even if it reaches a fraction of that, it's good to know how to liquidate some of it.

What makes you so sure that your crypto portfolio will be worth a lot in the future?  you say you don't own bitcoin, which means you hold altcoins, LOL.  even if it is bitcoin, there is no guarantee that it will bring you big profits, let alone if your portfolio is full of shitcoins.  you even risk not receiving any of your profits or capital, don't think about up to 130 million or just 1/10 of that amount. We need to be realistic in investing, don't be too delusional about profits, especially with shitcoin.

[Crypto Bull]

~snip~
No snarky answers, please. The above are only hypothetical examples. I don't own 5000 Bitcoin. Not even remotely close.

Then why the question at all?

Curiosity. Also, I own a good portfolio of cryptocurrencies that may be worth a lot more in the future. I seriously doubt it will reach 130 million, but even if it reaches a fraction of that, it's good to know how to liquidate some of it.

What makes you so sure that your crypto portfolio will be worth a lot in the future?  you say you don't own bitcoin, which means you hold altcoins, LOL.  even if it is bitcoin, there is no guarantee that it will bring you big profits, let alone if your portfolio is full of shitcoins.  you even risk not receiving any of your profits or capital, don't think about up to 130 million or just 1/10 of that amount. We need to be realistic in investing, don't be too delusional about profits, especially with shitcoin.

I didn't say I was "sure". I said my cryptocurrency portfolio may be worth a lot more in the future. No guarantees.

Also, I own sizeable positions in Bitcoin, Ethereum, XRP, Stellar, Litecoin, Dogecoin, Veechain, Cardano, Monero, Neo, and smaller positions of several others.

How would you go about cashing out very large sums of Bitcoin, or other cryptocurrency?

A hypothetical example:

You were fortunate to purchase five thousand Bitcoin, when it was only pennies a coin, and it's now worth a whopping $130,000,000. This is now sitting in cold storage in your digital wallet, and you want to cash out 100 million usd.

1) Are Coinbase and Gemini your only convenient options? Will they be able to cash out such a large sum, and send the proceeds to your financial institutions without issues?   

2) FDIC insurance only covers up to 250k per bank account. So, you would need more than four hundred accounts in order to cover all 100 million dollars. Is there a better way? Can you just send all 100 million directly to your Vanguard brokerage account? How do the ultra-wealthy do it??

3) What would happen if you suddenly sent a hundred million dollars to several banks/financial institutions? Would the IRS be immediately notified? Would your accounts get frozen? How do you avoid this?


No snarky answers, please. The above are only hypothetical examples. I don't own 5000 Bitcoin. Not even remotely close.

If you don't have that many bitcoins, then why ask such questions?
Why immediately legalize 100,000,000?
There are many jurisdictions in the world where you can legalize bitcoins and earn small taxes, but this will be done in stages so as not to attract the attention of the tax authorities. But sometimes it is better to resolve the issue of citizenship and tax residence first.

I have sizable positions of other cryptocurrencies, such as Ethereum and XRP, so the same principle applies to them.

[moderator's note: consecutive posts merged]

[Ale88]

To your point about moving to another country: This would be very problematic on multiple levels for me, one of which is that, thanks to the Communist, Obama, who managed to ram FACTA into law, it's very difficult for an American to open a bank account overseas, let alone deposit millions of dollars into one.

If you're an American and you want to move abroad to avoid paying a lot of money in taxes then you should buy a second citizenship, like St Kitts & Nevis, St Lucia, etc, and then renounce to the American citizenship. It's a very big step and it would be worth only if you could actually save a lot of money in taxes because just buying a second citizenship easily costs $150-250k depending on the country. There are also countries like Portugal that have a special investment program called Golden Visa (I think) but you need to wait 5 years before being able to apply for the citizenship so if you're in a hurry or let's say you want to sell everything during the next bull run you can't wait that much.

[michellee]

I don't want to cash it all out at once or gradually. That was a stupid act because the bank or anything related to the government would be able to find out that there were large transactions in my account. I prefer to cash out like I do every month and keep the rest in my digital wallet. Moreover, if there is no immediate need that requires me to spend a lot of money, I don't need to, and it's better to keep it in a digital wallet.

And if I want to buy something, say a new house, I will find out first how much it costs, what the payment system is and so on, then I can think of a way to cash out my Bitcoin and pay for the new house. If no need requires me to spend more money, I will not make large withdrawals. It is better to stay at the bottom and live on just what is necessary than to withdraw large amounts of money. I don't want to be the center of attention from the bank.

But it all depends on the circumstances because there are times when we need more money in a month. But that amount of money will not be as much as if we wanted to buy a penthouse. So it won't attract the attention of anyone.

[Ale88]

I don't want to cash it all out at once or gradually. That was a stupid act because the bank or anything related to the government would be able to find out that there were large transactions in my account. I prefer to cash out like I do every month and keep the rest in my digital wallet.

I don't know where you live but probably you are supposed to declare every single cash out you make, unless we are talking about $100/month. If your bank has any suspect about that money they can flag you even for very small transactions because for them it's always better to flag rather than not do it, so be careful. If you declare everything then of course you're totally fine.

[Cricktor]

Call Michael Saylor! He will gladly buy your Bitcoins and offer you a good price, no hassles. You should then also be able to make some arrangement with your bank that you'll receive a big amount of money from MicroStrategy's house bank, probably less suspicious for your bank. Take my proposal with a big pinch of salt. Tax issues not covered. In my country I can sell any amount of crypto tax-free after hodling it for more than a year. Maybe we should find some gentlemen's agreement?  Sorry, couldn't resist to offer this thinking-out-of-the-box solution...