I currently have a sum of money sitting in a wallet. Can I simply extract the value in one go and place it into my bank account? Or is there a protocal to follow?
What wallet exactly are you using?
Selling or buying of coins are done on crypto exchanges that are not wallets meant for holding coins, and if you worry about legal issues better talk with your lawyer who knows your local law, and don't ask legal advice from random dudes on forum.
So in order to extract from the wallet I need to sell the coins even though there is a large value on it? I cant just withdrawn it into a bank account? Seems very unusual and rather complicated.
Banks are for fiat money.
Wallets are for Bitcoin, best non-custodial and open source like Electrum.
Exchanges are for exchanging coins and fiat money.