Source of funds, and why crypto makes it harder

Source of funds asks you to evidence the origin of the money you deposited. Source of wealth goes further and asks how you came to have money at all. Large payouts can attract either.

What triggers it

• A payout large enough that the operator's own banking or processing relationships require it
• A balance far exceeding lifetime deposits
• Deposits arriving from addresses with a flagged history in blockchain analytics
• Cumulative activity crossing a reporting threshold over time rather than in one transaction
• A jurisdiction where the operator faces heightened obligations

What satisfies it in fiat

Straightforward. Pay slips, an employment contract, tax returns, a bank statement showing salary, a property sale contract, an inheritance document. Each shows money entering your control from a documented origin.

Why crypto is harder

Here is the problem in one sentence: a coin you bought in 2019, moved between three wallets, partly swapped on a decentralised exchange and consolidated last year has a provenance that is completely public and almost impossible to summarise into the document a compliance officer is asking for.

The chain shows every hop. It does not show a purchase receipt, an employer, or a reason. Blockchain transparency and evidentiary usefulness are not the same thing, and this is where the difference bites.

What tends to work

• Exchange transaction history showing the original fiat purchase, exported from the exchange rather than screenshotted
• Bank statements showing the payment to that exchange
• Where the crypto came from employment or a business, the underlying fiat documentation for that
• A written explanation of the wallet path, submitted alongside the above rather than instead of it

What tends not to work

• Screenshots of a wallet balance
• A block explorer link on its own
• Explanations without documents behind them
• Anything involving coins acquired years ago from a defunct exchange, which is a genuinely common and genuinely difficult situation with no clean answer

How long it takes

Days at best. Weeks is normal. Some cases do not resolve, and the outcome then depends entirely on the operator's terms and its willingness to be reasonable, which is not something you can assess in advance from marketing material.

The practical conclusion for large players

If you are going to play at a size where this becomes possible, sort your documentation out before it is requested. Export your exchange history now, while you still have the account. Keep the bank statements showing the original purchases. Know which wallet paths you can evidence and which you cannot.

This is unglamorous and it is the single highest value thing on this page. The players who lose money to source of funds requests are almost never the ones who could not have evidenced it. They are the ones who could have, and did not keep the records.