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.