My bank asks for source of funds for crypto: what to send
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Send a short paper trail where each step links to the next: the exchange statement showing the sale and the payout to your bank, the wallet history with transaction hashes showing how the crypto reached the exchange, proof that the wallet is yours, and a record of how you first bought the crypto. The goal is to make one deposit explainable from start to finish, with documents the bank can check.
Why your bank is asking
In the UK, banks are "relevant persons" under the Money Laundering Regulations 2017 (regulation 8). Regulation 28 requires customer due diligence. It also requires ongoing monitoring, including scrutiny of transactions and, where necessary, the source of funds, so that activity matches what the bank knows about you (regulation 28(11)).
Where a case is assessed as higher risk, regulation 33 requires enhanced due diligence. The listed measures include seeking additional independent, reliable sources to verify what you have told the bank, and closer scrutiny of transactions. For politically exposed persons, regulation 35 requires "adequate measures to establish the source of wealth and source of funds".
EU rules follow the same pattern. Article 13(1)(d) of Directive (EU) 2015/849 requires ongoing monitoring that includes scrutiny of transactions "including where necessary the source of funds". Articles 18a and 20 require information on source of funds and source of wealth in higher-risk cases. Regulation (EU) 2024/1624 replaces much of this framework and applies from 10 July 2027.
A large payment from a crypto exchange is a transaction a bank may need to understand. A request is a routine step in that process.
Source of funds vs source of wealth
The two terms are often mixed up. Coinbase's help center gives clear definitions:
- Source of funds is where the specific money or crypto in a transaction came from. For a cash-out, that is the sale of crypto on a named exchange on a given date.
- Source of wealth is how you built your overall wealth over time, for example salary, savings, a business or an inheritance.
For crypto, the two often meet. The bank sees money from an exchange (source of funds), then asks how you paid for the crypto in the first place. That answer usually points to salary or savings (source of wealth).
What evidence usually connects the trail
Exchanges face the same rules, and their own lists of accepted crypto documents are a good guide to what a reviewer can check. Coinbase lists statements from another exchange, trading history, wallet transaction history, blockchain transaction IDs, evidence connecting the external wallet to you, and tax or accounting records.
| Step in the trail | What it shows | Typical document |
|---|---|---|
| Money arrives at your bank | The deposit itself | Your bank statement |
| Sale and payout on the exchange | Crypto sold, fiat sent to your account | Exchange statement or transaction history in your name |
| Crypto arrives at the exchange | Which address sent it, when, how much | Wallet statement with transaction hashes |
| The sending wallet is yours | You control that address | A signed message from the address |
| The original purchase | What money bought the crypto | Purchase history and the bank statement that funded it |
| Tax position | Gains were recorded | Tax return or capital gains workings |
On tax records: HMRC says you must keep records for each cryptoasset transaction, including the type of tokens, dates, amounts, value in pounds sterling and bank statements. It adds that you may also want to keep wallet addresses.
Step-by-step checklist
- Ask the bank, in writing, which documents it needs, for which payment, and by when.
- Write a one-page timeline: when you bought, where, with which money, which wallets the crypto passed through, when you sold, and when the payout arrived.
- Download full exchange statements in your name. Cover the whole period from purchase to withdrawal, not just the final sale.
- For every self-custody address in the chain, export the transfer history with dates, amounts and transaction hashes.
- Prove control of each of those addresses by signing a plain-text message. See how to prove you own a crypto wallet.
- Check that the amounts line up from one hop to the next. Differences should be explained by network fees or trades you can show.
- Add tax records if you have them.
- Send one bundle with a short index on top. Keep your own copy of everything you send.
Common mistakes
- Screenshots without transaction hashes. A screenshot of a wallet app shows a balance, not a trail. A transaction hash lets the bank look up the transfer on a public block explorer.
- Gaps between exchange and wallet. The exchange shows a deposit from address A, but your wallet history covers address B. Every address in the chain needs a record, or a short explanation of how they connect.
- Starting at the sale. Showing the sale but not the purchase leaves the main question open: where did the money that bought the crypto come from?
- Names that do not match. Documents should show the same name as your bank account. If they differ, explain why.
- Sharing secrets. No bank or exchange needs your seed phrase or private key. Coinbase states it will never ask for your recovery phrase when requesting information.
If an exchange account was frozen at the same time, see which documents exchanges ask for. If the money is for a house, see using crypto for a mortgage deposit.
How Fundsheet helps
Fundsheet turns your EVM and Bitcoin addresses into a bank-style wallet statement PDF from public blockchain data: holdings at the report date, every transfer with date, amount and value at the time, counterparty labels where a public label exists, and a first-hop origin section such as "received from an address labeled Coinbase". You can add a signed message to show you control each address, and add exchange CSV exports, which are parsed in your browser and never uploaded. Each report has a report ID, a SHA-256 hash and a verification page where the bank can confirm the PDF is unaltered. It is a factual trace from public data, not a legal opinion, and the bank makes the decision. Start with a free preview at fundsheet.mintward.xyz.
This guide is general information, not legal or tax advice. Ask your bank which documents it accepts.
Sources
- The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, regulation 8 (legislation.gov.uk)
- MLR 2017, regulation 28: customer due diligence (legislation.gov.uk)
- MLR 2017, regulation 33: enhanced customer due diligence (legislation.gov.uk)
- MLR 2017, regulation 35: politically exposed persons (legislation.gov.uk)
- Directive (EU) 2015/849, consolidated text (EUR-Lex)
- Regulation (EU) 2024/1624, Article 90 (EUR-Lex)
- Provide information for an account review (Coinbase Help)
- Check if you need to pay tax when you sell cryptoassets (HM Revenue & Customs, GOV.UK)