Dividends as SoF

Meta said:

I have some crypto from long ago, with documents confirming getting the coins when they were cheap, but no history of transactions over the years,

Do you have a document to show where the funds came from to buy the crypto initially? i.e employment income statement, savings bank statement, loan agreement etc? Have you also tried to trace back the history? Even across chains it is still possible to do.

Meta said:

also bad passport etc.

Your doomed. High risk crypto + bad passport = extended due diligence at least

Meta said:

I've been told that it would be easier if the source of funds was dividends. I believe it can be easy for smaller amounts, but I don't know how it works for larger amounts (say, a few millions)?

Banks/EMI's say this as its easy for them to understand and complete the tick box exercise for due diligence purposes.

Meta said:

Can I inject my crypto into company as "capital contribution" or "shareholder loan", sell it all through a corporate account at crypto exchange and withdraw to a corporate bank account (the bank is okayish with crypto)? Then pay corporate taxes due if any, distribute everything as dividends and call it quits? Balances would not check out (no profit, but divs distributed), but there are places where accounting is not needed.

Swiss companies accept crypto as capital. The issue is this is placement step of money laundering 😕.

Meta said:

What's next? Will a bank statement showing a "Dividend distribution" transfer from a corporate bank account to the personal one and, say, a "Dividend resolution" docs enough for banks? Or they would ask for the company accounts, company docs, company KYC, check substance, require contracts, invoices and staff?

Depends on bank. They could even ask for audit report and your own tax return etc as I have had asked in past.

Meta said:

Please advise. Would it work? Is it legal at all? Would prefer to keep it legal. Looks fine to me. Started a business, funded with crypto.

All the company setup stuff is overkill.

Some people just create their own NFT collection and sell in marketplace for crypto. No one checks who the buyer is if you have sell receipts for the bank. But I do not recommend this obviously and best to work on tracking down transaction history.

Meta said:

I've been told that it would be easier if the source of funds was dividends. I believe it can be easy for smaller amounts, but I don't know how it works for larger amounts (say, a few millions)?

you slowly take them out and transfer to your bank account or EMI first and then bank account local bank. If you run them through a exchange first and then to EMI and then to Bank account it should work out

Meta said:

You said to a bank that dividends was SoF and they wanted to see audited accounts of your company and your personal tax return?

No

Meta said:

Very high amounts / curious jurisdiction or any specific reasons for that?

My case was 8 figure amount from crypto and the bank wanted legal opinion from a lawyer as to why I cannot provide my tax return when they asked. Apparently me living in Bahamas where there is no income tax was not good enough explanation for them 🙄. It would have been worse if I used a company because my company was over 12 months old they wanted an audit report. Had I just used a new company younger than 12 months they would never have asked.

dany said:

you slowly take them out and transfer to your bank account or EMI first and then bank account local bank. If you run them through a exchange first and then to EMI and then to Bank account it should work out

Wont work with 99% of banks. As all banks have some kind of flow of funds (FoF) software. So they can see the total of the deposits and withdrawals over time etc. You should get a demo of some banking software providers middle office capabilities and you will see the real time nature of the functionality and data they can collect on the movement of funds on your account. If you pay in money into an account slowly they will still see the net amount that has come through to-date for any year and can set up alerts ask for extra KYC or even freeze your account automatically if a threshold is hit i.e External Transfers > $1m.

Meta said:

Thanks for sharing. Quite hilarious regarding tax returns. I remember being asked on the source of funds for the transfer and I replied with sale agreement. A fresh one, I have sold some staff a few weeks earlier. You know what? They wanted to see tax declaration reflecting this amount! I appealed to them asking how I am supposed to get a declaration for that - it would be due the next year. The answer was that they can't provide me legal/tax advice and want to see the declaration. Can imagine ordering a legal opinion on that...

just ditch such stupid entities. banks / emis are nothing more than a commodity at this point. They will also only learn to push back with the country regulator if you as customer provide some pressure.
Doesnt mean one has to go head ups with arms, just a fine long extended period of silence combined with removal of all funds works too.

Meta said:

Hi,

I have a difficult situation with my crypto cashouts. I have some crypto from long ago, with documents confirming getting the coins when they were cheap, but no history of transactions over the years, also bad passport etc. I have a bank that accepts not-so-large withdrawals from crypto exchanges, but they ask me regarding each transfer and apparently not very happy about that. Not really reliable. Also if I move that money somewhere else, the next bank / real estate agent / whoever asks the same question regarding source of funds and are not as understanding as my bank. So, difficult.

I've been told that it would be easier if the source of funds was dividends. I believe it can be easy for smaller amounts, but I don't know how it works for larger amounts (say, a few millions)?

Can I inject my crypto into company as "capital contribution" or "shareholder loan", sell it all through a corporate account at crypto exchange and withdraw to a corporate bank account (the bank is okayish with crypto)? Then pay corporate taxes due if any, distribute everything as dividends and call it quits? Balances would not check out (no profit, but divs distributed), but there are places where accounting is not needed.

What's next? Will a bank statement showing a "Dividend distribution" transfer from a corporate bank account to the personal one and, say, a "Dividend resolution" docs enough for banks? Or they would ask for the company accounts, company docs, company KYC, check substance, require contracts, invoices and staff?

Please advise. Would it work? Is it legal at all? Would prefer to keep it legal. Looks fine to me. Started a business, funded with crypto. There is SoF, I will provide it to the crypto exchange and my bank. Exchanged, then decided to not go with the business, distributed all the capital back to shareholders. Probably, it should not be even taxed depending on the jurisdiction. All the same but now I have better source of funds docs and don't need to explain anybody again about that magical Internet money making your investments 10000000x.

If it's flagging up moving non large sums then it's not about SoW but you as a person - you are flagging up.

its your bad passport as you already write yourself.
You need to tackle this issue and find a place which doesnt think your passport is bad. Care to share the country?

Meta said:

Thanks for sharing. Quite hilarious regarding tax returns. I remember being asked on the source of funds for the transfer and I replied with sale agreement. A fresh one, I have sold some staff a few weeks earlier. You know what? They wanted to see tax declaration reflecting this amount! I appealed to them asking how I am supposed to get a declaration for that - it would be due the next year. The answer was that they can't provide me legal/tax advice and want to see the declaration. Can imagine ordering a legal opinion on that...

It's a cold world out there.

Martin Everson said:

Wont work with 99% of banks. As all banks have some kind of flow of funds (FoF) software. So they can see the total of the deposits and withdrawals over time etc. You should get a demo of some banking software providers middle office capabilities and you will see the real time nature of the functionality and data they can collect on the movement of funds on your account. If you pay in money into an account slowly they will still see the net amount that has come through to-date for any year and can set up alerts ask for extra KYC or even freeze your account automatically if a threshold is hit i.e External Transfers > $1m.

Okay thank you, I have not the bank insides to know that, but very enlightening to know this.

Transfering a million euro through Revolut to my own local bank wasn't a problem at all over 1 year, they have not asked questions any of them.

dany said:

Transfering a million euro through Revolut to my own local bank wasn't a problem at all over 1 year, they have not asked questions any of them.

Revolut I can tell you has very sophisticated FoF ability but they have been chasing a growth model (more clients more transfer volumes etc). I am not saying they they turned a blind eye to certain activity but they need all the metrics to make the case for themselves as they plan to list Revolut.

https://www.standard.co.uk/business...lars-in-sale-of-employee-shares-b1176863.html
Once they are listed and key investors achieve their exit plan the hammer will come down. They may become a nightmare to work with very quickly.

P.S Revolut would be mad to list in UK over US. Not even ARM wanted to list in UK and thats a UK company....lol

That is good insider information from a knowledge man in the industry.

In the newspapers they already wrote about Revolut as the new banking comet 🙄

Martin Everson said:

Apparently me living in Bahamas where there is no income tax was not good enough explanation for them

rof/% smi(&% The same thing happens to me regarding Monaco on a daily basis! It's mindblowing! Some banks have even rejected several law firms' letters of opinion. stupi#21

@Meta , did this work out for you in the end?

jafo said:

rof/% smi(&% The same thing happens to me regarding Monaco on a daily basis! It's mindblowing! Some banks have even rejected several law firms' letters of opinion. stupi#21

You mean a legal opinion from a lawyer ?

jorge said:

You mean a legal opinion from a lawyer ?

Yes! Law firm and a Big accounting firm. Made out to the recipient/bank and is NOT over 30 days old.
Do you know how much each of those letters cost? 🙄
Crypto it is! Let them ALL burn!