People send me money to my bank account, I send them their coins. What kind of explanation should I provide to these questions to ensure the sustainability of my account? Especially for the first question; we do not have any contracts, and the only documentation I can get is the invoices from the exchange. Should I be completely open with them or should I try to hide that I am selling cryptocurrency? Maybe there are someone who have had similar experience?
Edited: the country I am located in, crypto is completely legal.
Hiding or lying about your crypto activities to them might just lead to a major problem.
Your options:
1) Comply on what they asked to you since you hit the
"alarm". It's a sort of verification that most banks need to follow as a mandatory term under the country's anti-money laundering act. As crypto is legal there, you don't have to worry. You just need to be true to yourself.
2) Stop involving banks on your future bitcoin transaction activity. As for me, as much as possible, even I lived in a crypto-friendly country, I will not involve banks in my crypto-related activities to avoid questions that might violate my privacy.
For your reference, I know some people who do have the same experience as you back then. Their bank accounts were closed for questioning and yes before it got back, they told the banks their crypto activity which is mostly trading at the exchanges. In your case, you are trading directly with people so plan carefully what you will say.