Hi there,
I am trading Bitcoin on LocalBitcoins and similar websites. My bank just sent me an email asking me to provide some details regarding the transactions in my account:
- Please explain the origin of the funds received from *Name Surname* (what goods/services the funds have been paid to the account for) and provide relevant documentation (contracts, invoices)
- Explain what kind of relationships you have with *Name Surname*
- what business activity I am engaged in
- From *date* you have sent *amount* to Kraken, Payward Ltd. Please explain the purpose of such transactions.
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
Since the country you are located in, crypto is completely legal, then you have nothing to worry about. You just have to come clean concerning your activities and don't go on the defensive that they have no right because they do and intact, they can suspend your account to carry out activities from it until you provide necessary explanation and mind you, you have accepted this as part of their terms and conditions before you start operating your account with them.
When you get out to this, since its the volume of transactions that led to your account being flagged, you might want to go the route of registering a company and try to formalise your activities because with that, you can operate in a corporate manner and volume of transactions won't be an issue at the same time documents to prove transactions such as invoices or receipts won't be a difficult tasks.