My bank's KYC department noticed an incoming transaction from a crypto exchange (I borrowed some crypto from my friend and sold it), so now they ask questions (referring to some anti-terrorist act) and request invoices/payslips. Since I was just borrowing, I dont have any of those for that transaction.
How screwed am I (tax/legal-wise).
Thanks!
Posted Sep 28, 2023, 1:39 PM UTC
You will explain your actions at Mírov
Mírov
What's Mírov ?
You'll soon find out
You will explain your actions at Mírov
Ok found it on Wiki:
I am afraid that things might get more serious for me - I am an expat/immigrant. I don't really wanna this to evolve into serious problems with my visa.
Like, ok, this doesn't look too nice from tax perspective, but the thing is that I used to bring a substantial amount of cash with me from my homeland and deposit it into my bank account and nobody would bat an eye.
Damn you found out sooner than expected
Just don’t drop your soap when showering.
Which bank? Im offahoring crypto through reiffeisen bank and no probs
Yep, exactly this one.
Is this the time when you finally tell me about your pyramid scheme?
Reiffeisen is crypto friendly?
are you Russian/Belorussian and using Raiffesen? If yes, likely related to https://www.seznamzpravy.cz/clanek/domaci-zivot-v-cesku-banka-nam-rusi-ucty-a-nerika-proc-stezuji-si-rusove-zijici-v-cesku-236859, not your crypto adventures
Right, I am one of those nationalities. I have read the article...and it looks like they started inquiring just as a formal process since they don't really have to provide any justification...
And that sucks...A LOT.
You need to tax it, yes.
If you borrowed from a friend, there should be a contract, that's the justification together with an exchange statement of the sell transaction.
As others said, you will is be able to explain this if you show them contact confirming you borrowed the crypto and then confirmation of sale transaction from the exchange. You will still have to pay (most likely) capital gains tax of 15% on the sale of the said crypto.
I don't understand why you did not ask your friend to lend you the money in some fiat currency. Would have been much easier and would not involve crypto.
Hire a financial lawyer and or tax guy to advise you on this. I am not a financial advisor nor lawyer.
well, because
I am quite sane to not go to my homeland now (I am male) to pick up cash from him.
The guy could not bring that much cash on him into Europe (currency export limits).
The guy could not use ATM in Europe because cards from my country do not work in Europe anymore lol
I already have had issues with bank transfers getting stuck for months at an intermediate banks, so I wasn't going to try that again.
He was going to visit Europe anyway, so when we met at <country name>, we decided to go with crypto
They will probably refer this case to Financial analytics bureau and they will further investigate you for money laundering, because such transaction is pretty suspicious and your “explanation” definitely doesn’t help.
You can also expect that bank will terminate your bank account because you are risky client now.
Is there any kind of 'pleading guilty' process? Sort of 'show up at tax authorities and tell them that I fucked up and willing to pay taxes plus hefty fine'?
I would definitely not do that at all. You basically point a loaded gun at your head and pull the trigger.
Instead of that I would first get in touch with your friend. Get any documentaiton from him that it is the money you received and potentially get in touch with a lawyer.
Worst thing you could do is going to authorities and telling them you are guilty when in fact you may not be.
This. Stand up for your rights. Rs not make it easy for government to treat us like this. Also consider next time to cash out in smaller chunks to avoid this bs.
It isn't just that. What he did doesn't outright have to be illegal. So if he goes and say to the tax authorities "hey I think I did something illegal" then they will find and think what he did is illegal or outright trap him in bureaucracy hell for several years.
Definitely don't "plead guilty" what would you even plead guilty too? What you did is not illegal at all, the problem is that you don't have a good way to prove it. The suspicion is essentially that you're laundering money, definitely don't admit to that!
I suggest contacting a lawyer see what they say. I assume you could either get your friend to sign an affidavit stating that he lent you the crypto (not very convincing) or write up a contract with for the loan that with signatures in the past. (Slightly more convincing)
This is definitely not legal advice