Question Crypto assets holding SOF declaration
- Thread starter mraleph
- Start date
- Status
Your perception is funny. Perhaps true.
No illicit funds assumed. But, I'm more interested in brainstorming this particular compliance moment - you have a client stating it has crypto assets held in XMR. How can we present SOF or tax authority counter-prove it? How can public authority claim and prove that the crypto assets held in XMR were by any chance suspicios?
At this moment, I can't see an issue if private or legal person comes and states "I have reasonable ammount in SFr held in XMR and I'm willing to pay gain and income tax."
Well they might require how you acquire XMR at the first step, like USDT -> XMR withdrawals etc.
If all of your clients sent you XMR straight, no luck, not a single penny can be cashed out. Think of XMR as a Iranian Rial, no one would accept that. Event if its 10 digits..
If you show history of how you bought XMR at first place, then they can go thru chainalysis and maybe everything will be fine
Thank you for answering, but consider that XMR can not be traced with blockchain analysis.
Also, this is hypothetical - but anticipated scenario for which I would prefer to have a solution. This is not related to real business relationship and crypto assets holding nor mine in that matter.
You would be suprised how much currency you mentioned is actually accepted.
Original question still stands - how any public authority or financial institution can prove that SOF are illicit if holder presents appropriate proofs for crypto assets specifically held in XMR?
i meant that. its simple,
think of that;
you're onboarding manager at the bank, even forget about the tax office;
someone goes in; says he holds XMR and wanna cashout, here is the steps;
1- you require him to give all the details BEFORE he bought or got XMR, so you can do chainalysis and ask further questions then maybe onboard him
2- if no history before XMR; you say we will get back to you (by history i meant he will prove all the steps that ends up in getting XMR)
thats all
response to original question persists; if you straightly bought XMR or received XMR, with no history regarding buying it at first place via bank deposit, Tether or bla bla there is no way to prove sof even everything is legal. your documents will be simply ignored
Again, XMR blockchain analysis is not possible.
Hypotheticaly, client can obtain invoice(s) from another person(s) and legitimize the crypto assets. After that, an OTC deal may be performed and fiat can be deposited in bank account afterwards. Apart from official investigation, how can we perform a rizikoprofil assessment without blockchain analysis?
Necker cube - my question is about limited case regarding the XMR general features versus AML compliance not the tax evasion and money laundering advice seeking.
Serious question -> why on earth would you deposit XMR into a CEX / Other? instead of Atomic Swapping it to another token/coin and retaining a form of paper-trail->record.
Even if you claimed from legitimate work, chances are as they can't track XMR easily they'd
A) de-bank you
B) SAR you
Their (compliance) is to cover their arses, the Governments job is to police, investigate and charge, if you have legitimate XMR, and they investigate and you show the paper-trail, then you are 'clean/clear', but there is no point creating problems with the merchants compliance team even if innocent (less friction = easier living).
Even if you claimed from legitimate work, chances are as they can't track XMR easily they'd
A) de-bank you
B) SAR you
Their (compliance) is to cover their arses, the Governments job is to police, investigate and charge, if you have legitimate XMR, and they investigate and you show the paper-trail, then you are 'clean/clear', but there is no point creating problems with the merchants compliance team even if innocent (less friction = easier living).
In case of my question - it's anticipated compliance nightmare scenario where we may have dealings with privacy obsessed clients 🙄
Overcomplicating this...
Then automate atomic swaps from x wallet to x wallet currency, Or via some form of contract or automatically
You have a compliance duty to do your DD at source, when a client comes on-board, this is no different to how you'd treat in fiat terms
Example have client in HK he pays in HKD you do DD on and convert to EUR and sepa via corresponding bank to Europe via ECB
You've done the paper trail and compliance checks accepted funds converted funds moved to corresponding bank who've moved them on to European bank.
Crypto is no different
You are paid in XMR - do your DD convert in chain (via Atomic Swap) record all transaction records append to client account in searchable fashion - you now have say BTC which you swap to say EURC and send to EURC exchange in Europe - convert to euros and then deposit into fiat account - record all transactions and deduct appropriate taxes.
Fiat rails works like crypto think of each fiat as just another shitcoin for example
You send SGD from Singapore account to EUR account in Belgium -> no SEPA corresponding bank so it swaps/clears into $, this moves SGD to SDNY there is cleared and converted by the corresponding bank clearing partner (JPM) they then convert to $ and send $ or EUR to the ECB dependent on what the ECB wants that day and it's bunched in thousands of other transactions, at the ECB if it was $ sent they convert to EUR and then release EUR to the major bank or to the regional bank you bank with if it is big enough to bank directly with the ECB if it's EUR sent from SDNY then no conversion but still routes through ECB, the EUR show up on your EUR account.
Crypto removes all these processes (in technical terms) just not the fiat side (into EUR in your account-yet) in fiat terms this is all done behind the scenes, in Crypto terms you just need to do your DD/AML with the client (like usual, where required - AML may not be required dependent on size /scope/activity etc).
For a legitimate businesses getting paid by clients it is near impossible. It raises a lot and I mean a lot of eyebrows and potential reports as others pointed out. For police it is not impossible to track XMR itself or other bridged chain transactions.
Very well put as well as the other response. If you are trying to provide some privacy for your "client" XMR payments is absolutely the worst way to do it.
Ask your clients to pay you in more "acceptable" cryptocurrency one where you can do an AML assessment through a bot easily.
Thank you all for brain-storming. This is ideal environment but 🙄
I'm confident that all of us had clients obsessed with anything popular, including privacy.
Just to be clear, I'm on line with @gh0p and @wellington. Privacy is non-existent the moment AML procedures are put in place.
This was hypothetical question about payment option(s) for specific project. The client is obsessed - to put it mildly - with privacy and anonymity - and thought that XMR will do all sorts of magic. We broke that mirror.
We may opt to not do business at all as we are not willing to advise anybody how to do black magic.
I'm confident that all of us had clients obsessed with anything popular, including privacy.
Just to be clear, I'm on line with @gh0p and @wellington. Privacy is non-existent the moment AML procedures are put in place.
This was hypothetical question about payment option(s) for specific project. The client is obsessed - to put it mildly - with privacy and anonymity - and thought that XMR will do all sorts of magic. We broke that mirror.
We may opt to not do business at all as we are not willing to advise anybody how to do black magic.
Holy moly! 😳
I 100% love your client! smi(&%
He's my Doppelgänger rof/%
May Cai Shen (财神) shower him with infinite prosperity and good fortune while annihilating his transgressors! 😎
Kudos to him! 😉
- Status