If you cash out crypto proceeds to a German bank account, there is a growing chance the compliance department writes to you: please document the origin of these funds. Between that request and a frozen account there are often only weeks. This article explains what banks want to see, where proofs fail, and how to check your own history before someone else does.
Why banks ask at all
Under German anti-money-laundering law, banks must review conspicuous inflows. A threshold of 10,000 euros is commonly cited, but proof can be demanded below it too. Crypto proceeds are treated as inherently explanation-worthy by many institutions: the money arrives from an exchange, not an employer, and the bank cannot see the chain behind it on its own.
And it is not only banks: notaries in property purchases and exchanges themselves increasingly demand documented source of funds.
What the bank wants to see: the closed chain
The core of every source-of-funds proof is a chain without holes:
- Euro deposit from your own bank account to the exchange, evidenced by the bank statement.
- Purchase of the crypto assets on the exchange, evidenced by the full export.
- Custody and transfers between exchanges and your own wallets, where every deposit is attributable to a known prior withdrawal.
- Sale and payout back to the bank account.
Every crypto inflow that cannot be attributed to a known source is a gap, and gaps are exactly where proofs fail.
The supporting records: bank statements for the original euro deposits, machine-generated full exports of every exchange used, covering the entire period, the history of your own wallets, and, depending on the case, tax returns or assessments that put the proceeds in context.
Why screenshots fail
A screenshot proves a balance at a moment in time, not the origin of funds. Compliance desks demand machine-generated exports over the entire period, because only those can be checked and linked to other records. Answering a source-of-funds request with account screenshots invites the next, harder question.
The four typical gaps
In practice, chains fail at the same points almost every time:
- A deposit with no source. Crypto arrives on an exchange, but no withdrawal of yours from another exchange or wallet matches it. This is the classic hole: to the bank it looks like money of unknown origin, even when it is merely a missing export.
- The export starts too late. The computed balance of an exchange would go negative based on the records presented: more was sold or transferred than ever documented as arriving. Older records are missing.
- Your own wallet is missing. Transfers to your own hardware or software wallet are harmless, as long as that wallet's history is presented too. Without it, the chain ends in a void.
- The exchange no longer exists. Accounts at closed or insolvent providers often cannot be exported anymore. Those gaps cannot be closed, but they can be documented.
Check first, explain later
Order decides everything: whoever starts collecting exports only after the bank's letter works against a running deadline. The saner sequence:
- Collect all exports: every exchange used (full export, entire period), every own wallet.
- Check the chain. This is exactly what we built the source-of-funds check for: a free tool that analyses your exports entirely in your browser, matches transfers between sources, and names every gap concretely. Your files never leave your machine; the check works offline.
- Close the gaps while there is no pressure: pull missing exports, extend older periods, export wallet histories.
- Organise the records. The check can generate a source-of-funds file: a single document with the matched chain, the open items, a list of records to attach, and checksums that let any recipient verify the analysis.
When a gap can no longer be closed
Not every gap can be repaired. A closed exchange delivers no more exports; records from early years sometimes simply do not exist. Such cases should be documented with everything still available and, in doubt, handled with legal counsel before the bank asks. A structured tool organises your own records; judging a contested individual case belongs with a specialised law firm.
This article structures general requirements and is no substitute for legal advice in a specific case. Whether a proof satisfies a particular bank is decided by its compliance department.