Bitstamp Requests You to Provide Source of Wealth Clarification for Money and Cryptos
Bitstamp, as one of the largest exchanges where Bitcoin and other cryptocurrencies can be traded, now requires source of wealth clarification. This means that Bitstamp customers must prove the source of their Bitcoin and funds.
If the proof of source of wealth clarification is not submitted according to Bitstamp’s request, an account suspension is imminent. Withdrawal of cryptos or funds will then no longer be possible without further ado. The part of your assets lying there is effectively frozen.
Other Crypto Exchanges Also Require Proof of Source of Wealth
The issue of proof of source of funds is not peculiar to Bitstamp, but affects all reputable exchanges equally – and internationally.
Users’ experiences with the crypto exchanges just mentioned vary. Some “get along fine” by submitting and accepting proof of source of fiat money or Bitcoin, for example, as requested. Others submit proofs of funds source, but these are not accepted or only partially accepted. In such cases, the assets of the affected person are at risk – because trading or a payout is initially no longer possible without legally compliant proof of source of wealth.
Special Feature When Bitstamp Asks for Source of Wealth
It is important to understand which legal situation applies at all. This is because not all crypto exchanges are subject to the same jurisdictions.
For example, Bitpanda is based in Austria and the Austrian legal situation regarding source of wealth clarifications applies in this regard. Kraken, on the other hand, is a US company that does not have to follow European legislation per se.
Bitstamp has its company headquarters in England. This is interesting because England recently completed the “Brexit” and is therefore no longer subject to European law without further ado. Therefore, primarily the British legal situation regarding the proof of source of wealth for Bitcoin, cryptocurrencies and money applies with regard to Bitstamp.
For those particularly interested, the UK Sanctions and Anti-Money Laundering Act 2018 is publicly available for viewing and it is also worth taking a look at The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 .
The latter contains, for example, the following provisions (extract):
Whatever German, Austrian or Swiss observers of the political situation in England may think at the moment, the United Kingdom is certainly competent when it comes to financial issues and banking. It is not surprising that Bitstamp, as a UK-based company, takes money laundering regulations and financial law seriously.
How Does Bitstamp Request a Source of Wealth Clarification?
First of all, affected persons receive a message from Bitstamp via email – the language is English, Bitstamp does not communicate in German at this time.
In this proof of funds message, Bitstamp informs the user that source of wealth clarification must be provided for the cryptocurrencies deposited or the funds used. Bitstamp thus proactively requests proof of source of financial funds.
Affected parties respond to this message accordingly by submitting evidence. This evidence is then checked by Bitstamp.
The assets are then either unlocked or the submitted proof of source of wealth is rejected. The latter leads to the assets being frozen on the Bitstamp platform for the time being.
Write in English to Bitstamp – Free Translation Tools Help
We recommend using a translation program, for example Google Translate, in case of insufficient English skills. These translation programs provide good results, so it is possible to communicate unerringly in English when Bitstamp asks for proof of source of funds. However, let Bitstamp know that you are using a translation program – this way, their support will know that your English may be “a bit machine-like” because of it.
Don’t be surprised if Bitstamp never mentions the term “source of wealth clarification” or “proof of source”. The following other terms may also be used:
- source of funds
- proof of source of funds
- origin of funds
As a sample for a possible communication with an entity that requires you to provide proof of funds, you can use our text on the Samples and Templates page. As described above, you can use an online tool for translation.
What to Expect from Bitstamp And Proof of Source of Wealth
You do not successfully provide proof of the origin of funds by making claims. It is about submitting appropriate documents that convincingly retell the “story of your money“.
In the event that Bitstamp requires source of wealth clarification, it is essential to understand where your cryptocurrencies originally came from, and/or the original source of your fiat deposits.
Example 1: You deposit Bitcoins at Bitstamp to sell them there for Euros. Bitstamp wants to know where these Bitcoins came from. This does not mean just stating the last “station” on the blockchain. A proof of source of funds by stating “the Bitcoins come from my wallet” is not sufficient. You must state where and how you first acquired these Bitcoins.
Example 2: You transfer Euros to your Bitstamp account to buy cryptocurrencies. Bitstamp is now interested in finding out where you actually got this sum of Euros. The statement “I have saved up” will not be sufficient – this must be shown credibly and comprehensibly by means of salary slips, tax returns or other documents.
Who Can Help If the Proof of Source of Wealth for Bitstamp Fails?
It may happen that Bitstamp does not accept the proof of source of wealth you have submitted. Not even after multiple correspondence by mail. The result is an account suspension, your assets can no longer be moved.
In such a case, you should seek assistance from a specialized lawyer. This person should ideally have experience in dealing with proof of source of funds for financial assets and have already handled cases related to crypto exchanges. Your lawyer must also be able to communicate in English with legal accuracy.
Your lawyer will contact Bitstamp to make the proof of source of funds you submit more legally understandable. It is also possible for a lawyer to prepare legally compliant proofs of source of origin if the proofs you have already submitted have not been properly prepared.
However, a lawyer is only of real help if your situation with Bitstamp actually failed due to legal understanding or preparation of legally compliant proofs of source of funds. If you cannot provide any proofs of source of funds because the cryptocurrencies or euro funds come from dubious sources, you will not be able to get anywhere even by means of a lawyer – as a reputable lawyer will certainly not help you carry out money laundering.
Questions and Answers On Proof of Source of Wealth at Bitstamp
Do I need to have the documents for Bitstamp translated into English?
This is usually not necessary. Bitstamp itself communicates in English, but to our knowledge has not yet required English documents for proofs of source of funds from German, Austrian or Swiss customers.
However, if your submitted proofs of origin are obviously untrustworthy for Bitstamp, a certified copy in English could be requested.
Does Bitstamp store my documents?
As a financial service provider, Bitstamp is obliged under English law to store the source of wealth clarifications accordingly. This is the only way that investigating authorities can check the financial flows of persons suspected of money laundering in case of doubt.
Incidentally, the German, Austrian and Swiss crypto service providers also store such proofs of source of funds for a long time - as this is required by the respective national legislators.
Does Bitstamp require clarifications only for cryptos, or also for cash deposits?
For both. Money laundering regulations apply to all types of financial transactions, this includes crypto-transactions as well as fiat transfers.