Soon or after, we all need to cash out cryptocurrencies in Fiat.
Many people do it through wire transfers, or maybe using a crypto card such as Binance Card or Bitpanda Card.
Little they know (or at least little I knew) that AML laws, which are obviously necessary, are at the moment extremely crypto unfriendly.
Background: how I made 500$ to 150k $ in 9 months (and I paid taxes)
Despite knowing cryptos since 2010, I decided to step in with a consistent part of my wealth of the time only in February 2021.
Being a developer, I immediately took the Solidity route and I started programming on the blockchain.
Tokens, dapps and increasingly complex applications, linked with a (at least until now) winning trading strategy, led me to multiply the initial investment, 500$, in 150k $.
While I still have my wage work, I often rely on crypto cashouts to pay for funny things or daily things.
I also always pay my taxes on everything, no sketchy behaviours.
Which card?
Soon I needed to cash out something. Wire transfers were slow, so when I first heard about Binance Card I started using it. Until my card started malfunctioning and I decided to switch to Bitpanda, mainly due to the ease of use.
Everything is smooth: sometimes Bitpanda needs to verify big transfer but ok.
The AML incident
This until 3 days ago.
I tried to send 4k to my Revolut account through Bitpanda, just to see my money frozen.
Crypto withdraws were disabled too.
An email informed me that they needed proof of source of funds, and I replied with the deposit history.
Surprisingly, it wasn't enough.
Long story short: by law I would need to track every single USDC or USDT back to Fiat. Every. Single. Crypto.
Everybody knows that working in DeFi leads to hundreds if not thousands of tx per month, and more as I said I went 500 fiat to 150k value without reinvesting anything.
With a ton of headhache I MAY have traced a path to enough Fiat to justify the transfer, but that is really a nonsense.
Why? What is the problem?
- Asking anyone to trace crypto to fiat is a nonsense if there are not tools or instruments available from the asker to trace it all back
- This because if i have 4k USDC that is probably due to crypto selling, that could derive from crypto buying with dev money, taxes, deployments and what not
- Even trying to comply leads to a confuse path without any verification possible if not a logic common sense
- This could lead to permanent freezing
Why this rant?
First of all because I have 4k frozen on Bitpanda. Probably not on them (I hope) but are there.
Second: I am ok with AML laws but damn, when one does a law it should be at least AWARE of the topic.
End of the rant.