Crypto source of funds... ideas?

[moneyhoney]

Hello everyone,

I have a decent amount of cryptocurrency and I'm interested in using it in real-world applications, at least partially. Initially, I didn't anticipate this growth, so I didn't incorporate these funds into a business entity, even though they were acquired through affiliations. My personal bank is willing to accept deposits from crypto exchanges, but they require proof of funds and prefer non-business sources. Therefore, I'm exploring alternative approaches or narratives. I'm not concerned about my country of residence, which isn't a major world economy, and my bank is located in a reputable international financial center.

Ultimately, what would you recommend? Should I avoid using my personal accounts and instead focus on business solutions that seem more straightforward to manage?


Thank you for your advice!

 

[Sols]

Can you go back and simply retroactively document the source of funds? Dig up old emails, commission payout statements, and such. If it's genuine affiliation and if those activities were done in your own name or in the name of a company you have since sold or liquidated, there's a chance your bank will accept it even if the original origin was business.

If the company that earned this money still exists, declare a dividend in crypto (or declare a fiat dividend but pay it out in crypto), and move the crypto a new or another wallet that you only use for personal usage. At that point, when you convert the crypto, it's not company money ”” it's dividends that were paid to you and is your personal wealth.

Another option is to cash out the crypto into another bank account, with a friendlier bank. Then, from there, gradually move the money to your main or preferred bank.

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[moneyhoney]

Sols said:
Can you go back and simply retroactively document the source of funds? Dig up old emails, commission payout statements, and such. If it's genuine affiliation and if those activities were done in your own name or in the name of a company you have since sold or liquidated, there's a chance your bank will accept it even if the original origin was business.

If the company that earned this money still exists, declare a dividend in crypto (or declare a fiat dividend but pay it out in crypto), and move the crypto a new or another wallet that you only use for personal usage. At that point, when you convert the crypto, it's not company money ”” it's dividends that were paid to you and is your personal wealth.

Another option is to cash out the crypto into another bank account, with a friendlier bank. Then, from there, gradually move the money to your main or preferred bank.
Click to expand...

Thanks for taking the time.

I can document the source of funds, not with a lot of docs but should be enough I guess. But since I also use the same bank for my business, I'm pretty sure they wouldn't like the money being funneled as "personal" when it should be business; and unfortunately, I cannot retroactively invoice the money, it would be late for that now (things are different for future payments, learned the lesson).

I don't know if another bank would be ok with that either, my other main bank (where I don't have the business but it's much more strict in general), told me the same: they don't want to deal with business money in a personal account.

 

[Sols]

It sounds like a dividend would work.

If the amount is X, declare a dividend from the company to yourself equal to that amount. You then transfer X amount from your company's crypto wallet to your personal crypto wallet. The crypto is then your personal assets. When you cash out the crypto on your personal wallet, the SOF is dividends from your company. If someone asks about the company, the company's SOF is the affiliation activities. Then when you withdraw fiat from the crypto exchange to your bank, it's a personal transfer of funds.

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This is the probably the answer to your question.

 

[moneyhoney]

Sols said:
It sounds like a dividend would work.

If the amount is X, declare a dividend from the company to yourself equal to that amount. You then transfer X amount from your company's crypto wallet to your personal crypto wallet. The crypto is then your personal assets. When you cash out the crypto on your personal wallet, the SOF is dividends from your company. If someone asks about the company, the company's SOF is the affiliation activities. Then when you withdraw fiat from the crypto exchange to your bank, it's a personal transfer of funds.
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This makes sense, but the company didn't invoice the amount, so there is no "crypto wallet" for the company. Am I missing something here?

 

[EliasIT]

Why don't you open a Wise and Kraken account, transfer coins to kraken, transfer to wise and transfer to your bank account as some sort of income.. i.e. gift from relatives or private sale - you could make up a sales agreement for a private sale or something.

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[Sols]

moneyhoney said:
This makes sense, but the company didn't invoice the amount, so there is no "crypto wallet" for the company. Am I missing something here?
Click to expand...

OK, let's break this down.

You wrote:

I have a decent amount of cryptocurrency
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Where is that crypto currently sitting?

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This is the probably the answer to your question.

 

[moneyhoney]

Sols said:
OK, let's break this down.

You wrote:


Where is that crypto currently sitting?
Click to expand...

Cold wallet.

EliasIT said:
Why don't you open a Wise and Kraken account, transfer coins to kraken, transfer to wise and transfer to your bank account as some sort of income.. i.e. gift from relatives or private sale - you could make up a sales agreement for a private sale or something.
Click to expand...

Wise won't like any incoming funds from Kraken and might ask itself for some source of funds doc.

Not sure gift or private sale would be viable, but I was looking for something like that, like selling some luxury watches. But not sure.

 

[JohnnyDoe]

You can always sell crypto to me privately and receive fiat or gold.

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[moneyhoney]

JohnnyDoe said:
You can always sell crypto to me privately and receive fiat or gold.
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FIAT in the form of cash? I can get that already, just want the money in a bank account. If personal is better, else I will move it as a business eventually in some way.

 

[JohnnyDoe]

moneyhoney said:
FIAT in the form of cash? I can get that already, just want the money in a bank account. If personal is better, else I will move it as a business eventually in some way.
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Fiat on a business account is feasible.

But are you sure you want to convert it to fiat? There are not many things you can't buy with crypto today.

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[moneyhoney]

JohnnyDoe said:
Fiat on a business account is feasible.

But are you sure you want to convert it to fiat? There are not many things you can't buy with crypto today.
Click to expand...

Yeah, fiat on a business will be my final choice if I don't find a better one.

Regarding your second question: I feel like I'm a bit too exposed to crypto, so cashing out and buying a condo would be nice. I don't need to rush into it, but it's something that would be good to do eventually.

 

[JohnnyDoe]

moneyhoney said:
Yeah, fiat on a business will be my final choice if I don't find a better one.

Regarding your second question: I feel like I'm a bit too exposed to crypto, so cashing out and buying a condo would be nice. I don't need to rush into it, but it's something that would be good to do eventually.
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There are many places where you can buy real estate with crypto. Search in the forum, it was discussed many times in the past.

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[Sols]

moneyhoney said:
Cold wallet.
Click to expand...

OK, then that cold wallet is your company's crypto wallet. If you've used it for other transactions, you can say you commingled personal and business money. That's not good but as long as you correct it for the future and have a dedicated wallet just for the busines, it should be fine.

You can now declare a dividend in crypto, whereupon you transfer the corresponding amount to another, personal crypto wallet. That crypto is then your personal asset.

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This is the probably the answer to your question.

 

[moneyhoney]

Sols said:
OK, then that cold wallet is your company's crypto wallet. If you've used it for other transactions, you can say you commingled personal and business money. That's not good but as long as you correct it for the future and have a dedicated wallet just for the busines, it should be fine.

You can now declare a dividend in crypto, whereupon you transfer the corresponding amount to another, personal crypto wallet. That crypto is then your personal asset.
Click to expand...

I do understand what you mean; what I don't understand is how to justify the company having a crypto income/wallet if it never invoiced for these transactions. Am I missing the point here?

 

[Sols]

moneyhoney said:
I do understand what you mean; what I don't understand is how to justify the company having a crypto income/wallet if it never invoiced for these transactions. Am I missing the point here?
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You wrote:

they were acquired through affiliations
Click to expand...

And:

I can document the source of funds, not with a lot of docs but should be enough I guess
Click to expand...

So there's your documentation. They were affiliation payouts. Collate what documentation you have or can get after the fact. As long as you have paid ”” or are willing to pay ”” taxes on the money, work with your accountant to book the income as company revenue, and then sort it out. Needn't be much more complicated than that.

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This is the probably the answer to your question.

 

[moneyhoney]

Sols said:
You wrote:

And:


So there's your documentation. They were affiliation payouts. Collate what documentation you have or can get after the fact. As long as you have paid ”” or are willing to pay ”” taxes on the money, work with your accountant to book the income as company revenue, and then sort it out. Needn't be much more complicated than that.
Click to expand...

Yes but it's not recent, so would be clear that I haven't declared it in the previous financial years as it was supposed to be. Not sure the accountant can help with that.

 

[Don]

moneyhoney said:
Hello everyone,

I have a decent amount of cryptocurrency and I'm interested in using it in real-world applications, at least partially. Initially, I didn't anticipate this growth, so I didn't incorporate these funds into a business entity, even though they were acquired through affiliations. My personal bank is willing to accept deposits from crypto exchanges, but they require proof of funds and prefer non-business sources. Therefore, I'm exploring alternative approaches or narratives. I'm not concerned about my country of residence, which isn't a major world economy, and my bank is located in a reputable international financial center.

Ultimately, what would you recommend? Should I avoid using my personal accounts and instead focus on business solutions that seem more straightforward to manage?


Thank you for your advice!
Click to expand...

Dividends could be one option, but it might expose you to significant tax depending on how you structure it.
You might want to relocate to a friendlier jurisdiction for tax purposes, where dividends will not be taxed.
Also, gifts received from private persons are not taxable or declarable for Estonian tax residents.
Other option if you is to lend crypto to a company, convert it at company level and pay it back in FIAT (zero tax possible).
You can also use crypto to inject it as a capital to your company, convert it, and then withdraw as FIAT (zero tax).

 

[Sols]

moneyhoney said:
Yes but it's not recent, so would be clear that I haven't declared it in the previous financial years as it was supposed to be. Not sure the accountant can help with that.
Click to expand...

Sure they can. These things happen all the time. You just submit amended accounts or take whatever path your accountant recommends is best in your situation.

There's no need to turn a simple accounting oopsie into money laundering.

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This is the probably the answer to your question.

 

[sunnyboy]

JohnnyDoe said:
Fiat on a business account is feasible.

But are you sure you want to convert it to fiat? There are not many things you can't buy with crypto today.
Click to expand...

Hello. How do you do? Сan you tell us a little more about your proposal?