Topic: CASHING OUT YOUR CRYPTO-CURRENCY PROFITS - page 10. (Read 1514 times)

No need to explain anything to your bank unless your are cashing out in millions in fiat every day or in week,I don't think people converting their crypto into fiat in millions are rare to find.

But you have the options for your source of money as well in website like localbitcoin and other site also might have it which can be used while you are filing your income tax.

Let's tackle it one by one.
First of all if I am making profits (or just happen to buy bitcoin at 1 dollar and now have thousands of it, doesn't matter, same logic) and want to put it on my bank account I just divide it into days, I don't put all my money into bank account all in one day, just put it in there everyday small by small and that will eventually become big.

What my country does is that they check the transactions not the accounts itself, they don't ask people "why do you have so much money in your account", no they ask "where does this big sum comes from" which means as long as its small amounts you can get bigger with time.

No, I do not let my bank know about it, they don't need to know and even if they do they have nothing to do about it. Yet again, I wouldn't let them know, useless.

I disagree somewhat.  Back when Circle was in the business of selling bitcoin, I'd made a number of small buys using my checking account, and the next time I visited my bank's main branch I got questioned by the bank manager--not joking.  She asked me what all those transactions were about, and it wasn't like there was a lot of money involved, nor did those transactions represent profits or anything like that.  Banks are very concerned about what you're using their services for, so I would suspect that if you suddenly started depositing lots of money into your account, it would raise a flag with them (depending on the bank, of course; I use a small, local bank).

On the other hand, if you're paying taxes on your profits then the bank can question you all they like and it won't matter much.  Even then, that's not really their business.  But I would certainly expect some scrutiny if you start making "abnormal" transactions.  I even got questioned by that same bank manager about a stock sale check I deposited that was a lot more than I usually deposit.  It's crazy.  You think your money is your own, to do with whatever you like, but they're watching.  Believe me.

  This is really a question that is very difficult to answer. Especially in some countries, it is not allowed to use crypto. I have never had a transaction so big so I do not know what to do if encountering such a situation. But in my opinion, I would split that money up and deposit it into different accounts

But cryptocurrency is not a source of income it is a currency which can be exchanged for fiat. So if you were to make a very huge transaction on an account that has not gotten such an amount before (in cryptocurrency or otherwise), your bank would definitely be interested in knowing the exact source of that income.

The bank only makes an inquiry when they find suspicious/strange transactions in your account with huge amounts involved and then you need to answer them while when you pay taxes, you need to mention it as per your CA's advise. Every country differs in laws and regulations when it comes to crypto so they have a different process. If you use exchanges that have ties with the bank, you wouldn't even need to bother as they know the source is crypto.

If you trade legally with cryptocurrency and you have done KYC on crypto exchange then any bank will not cause problems to you. They are mostly interested that money is not coming from illegal sources, and if you have proof that this is not the case why they would refuse your money?

You can not hide anything from bank, so to avoid possible problems it is better to go in bank and see what their attitudes are, do you need to provide any extra documents which can prove from where is money coming. It would be stupid that you just suddenly receive a large amount of money on your account, any bank who follow AML need to check such money transfers, and that means possible freezing of account.

As long as your country are support cryptocurrency I don't see any problem to tell them a truth that your income even huge or not is from cryptocurrency. But if you think it risky to tell them you just need other income that they cannot survey so you will be safe like business or anything. For sure deposting huge amount is needed to know where does your income came from but it's up to you if you tell truth or say something other.

My approach will be different. As much as possible, if there's another way to cash out those huge profits, I will try my best not to be involved in banks. Although our country is crypto-friendly, huge money transferred to any bank accounts even not acquired via crypto, is alarming to those banks and will subject automatically into questioning. So much hassle if you will tell then anything your crypto activity to the point that every transaction should be detailed including the private transaction.

Fortunately, there's another way available in my country to cashout those high figures although I can't do it on a single withdrawal and will take at least over a week depending on how much the amount involved. I can also do it via bank withdrawal as small withdrawals are not flagged.  However, as I mentioned, I don't want to be involved in banks especially at huge cashouts.

You have the option, to choose the right bank which accepts Cryptocurrency profits, there are some banks that agree to deposit your money coming from Cryptocurrency, your job is to trace them and you can start by asking them, you would not want to be late in knowing that they don't accept it and you already deposited a huge amount.

In some countries it might not go unnoticed and might be questioned, in cases of countries with such scrutiny one can make a staggered deposit with different bank accounts. Some countries demands all account linked to each other and monitored by central bank which it even severe, I will also save some of the profit into crypto stable coin .

If you suddenly start to make or receive huge deposits, no matter if they origin from cryptocurrencies or not, every bank will be a bit suspicious and they will ask some questions. But everything depends on the country and regulations.
Personally I don't think this is very smart idea. If you want to have such deposits in bank you rather open multiple accounts in few banks so at each account split some amount of money. That shouldn't be a problem for banks.

When my friend made his savings account on the bank, the question is somewhat close to this.

"How do you get your profits from this cryptocurrencies?"

I just told him one word, Trading. The exchange that we are using to transfer can be limited depending on the account level that you have. For example, you are level 2, the maximum amount you can send to banks is 35,000 pesos or just close to $673 a month. No other questions are asked about cashing out but the next questions are like, "How do we earn Bitcoin?", "Who made it?", "Can they earn the same Bitcoin as my friend?". we did not answer all of those questions, we just nodded and smiled.

There might be some issues experienced by cryptocurrency investors. Most of the large volume investors will have business accounts, and these accounts have got large volume transaction access. This way there is no need of providing any statement to the banks that the fund is from cryptocurrency investment.

Once I encountered an issue as I was using a savings bank account. It has got low limits, and the bank authorities personally had an enquiry. I didn't informed them it was from cryptocurrency investment, I informed this was transferred by my friend and finally the amount got released. Until then it was under hold.

This is a case to case basis IF bitcoin is legal in your local place and some banks are accepted on it then, there is no problem on telling them the truth. There are some banks adopt cryptocurrency and accept even the money you have deposited is come from cryptocurrency profit but there are some others are very strict because they are relying upon the local jurisdiction that it is possible your money come from laundering.

Observe first an ask information before you deposit, there are instances that might your money being froze/hold by them and even you are going to cash out you can't.

You did not mention if Crypto is legal or not in your country but if you have already a bank account therefore the bank will not ask where did you get your money anymore because during the opening of your account you will need to provide the details of source of your fund before approval but if they have information policies regarding over the limit of withdrawals and deposits then you will just tell them the truth.

Interest Ask. I don’t think that the bank’s employees will be interested in the sources of your potential profit until you replenish your bank account with a huge amount. Indeed, it’s very difficult to prove that the profit you received as a result of doing cryptocurrency. Therefore, it will be better to make your profit in different banks and in small amounts.
In my country, the tax on profit from cryptocurrency has not yet been introduced, so I can deposit large amounts to the bank, explaining the source of profit from working with cryptocurrency.

Hi everybody, I have a serious question to address:

How will you tell (or reveal) to your Bank that the huge daily (or weekly) deposits into your Bank Account are from crypto-currency profits?
- Would you go to your local Bank Branch and tell them ahead of time, that you are a crypto-currency investor BEFORE you make huge deposits?
- Would you go to your local Bank Branch and tell them that you are a crypto-currency investor AFTER you make huge deposits?

This question is important, especially for people of modest income that SUDDENLY start to make huge profits from crypto-currency.

EDIT: I would love to pop into my Local Bank branch (in the United Kingdom) to tell them that I am into crypto, but I am a local person in the area - I do not want to attract attention to myself (or to attract potential thieves), because we do not really know who these Bank staff really are, or if they have connections to the criminal underworld.
I do not want to turn myself into a local target.

EDIT 2: The reason why I was suggesting contacting the bank first, before making serious deposits (single large deposits or frequent small deposits), is because some banks just call the police (without contacting you first), when they notice strange transactions in your account.
When a bank calls the police on their customers, this automatically gives the police the permission to issue a "search warrant" on your living premises.
This means unwanted visits from the police, who have authority to scuffle through your possessions and seize all of your electronic communication equipment.
While doing this, they now have the opportunity to search your home for anything else that they think is wrong, or to issue trumped up charges against their victims.

The real reason why I want to contact my bank before I make any serious deposits from crypto profits, is to avoid the possibility of unwanted police visits or investigations. Police love to confiscate electronics (computers phones), which could prevent you from accessing any market while the electronics are in police custody.

EDIT 3: I am not scared of paying high taxes. I just want to cash out honestly, without being worried of the unpredictable and punitive behavior of the Authorities, who always criticize or attempt to make accusations "on suspicion" of wrongdoing.
I want to pay the correct tax, and get over and done with this issue. I do not want the Authorities chasing me around for unpaid taxes later in life.