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.