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Possible problem with declaring source of funds on CEXs?

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by COINS NEWS 114 Views

How much trouble can declaring source of funds be on Centralised Exchanges?

Here is my situation:

I have been trading crypto for several years. Up until this point, I have mainly used one exchange, in combination with my self-custodial wallets. The exchange I’m using (Bitstamp) haven’t given me any troubles so far. Probably, because most of my transactions went through them, so they can see my whole history.

I keep the majority of my trading funds in crypto, and this has been like this for over 5 years.

Now, here is the problem: I want to start using other exchanges for the purpose of leveraged trading, but I’m so afraid to make a deposit, and having my account locked. I read all kinds of horror stories. Particularly with Binance, but other as well, where it’s impossible to pass the approval process.

The main problem is that most of my founds have been in crypto for several years, and they grew in size too. So, I won’t be able to provide bank account statements to prove the source of funds, because I simply did not have many bank transactions! Of course, nothing shady is going on, and I pay my taxes and everything. However, even my tax reports wouldn’t give a full picture, because where I live, we only need to declare what we ‘take out’.

How much trouble can this cause when exchanges ask for source of funds? Is this a problem at all? If yes, how do you overcome it?

Just for reference, I’m talking about mid to high five figures.

Another idea: Maybe I should just use perpetual DEXs instead of CEXs for now. I heard they are quite good. That would eliminate the problem. And I’ll worry about the rest later.

So, what everyone thinks? Is proving source of funds really that big of a pain? Especially when someone keeps most their funds in crypto, and has no bank account statements?

Which exchanges are the most fussy? And which ones are less problematic? How about Bybit and Binance? Or how about some smaller ones (Deribit, Kucoin, OKX comes to mind, but there are many)?

submitted by /u/BurnedShipMan
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