Banking Regulation as an extension of Government Surveillance

by sand_puppy

2 days ago VTGothic recommended and linked this excellent video talking about the governmental financial surveillance of citizens. One point was that the banks were put in the position of being the enforcers of government policy. SARs (suspicious activity report) to the government are filed by banks on their customers at the slightest suspicion of illegal activity.

Video here

Well, I had the ex[perience of encountering this dynamic personally last week as I tried to sell Bitcoin, held on my hard wallet, a Nano Ledger, through the software Ledger Live, that runs the Ledger Nano. I was removing BTC, selling it on Ledger’s “partner exchange, Coinify”, and asking the USD to be sent back to my checking account at an American bank. Then I get this email from Coinify, a European exchange.

Dum-da-dum- dum….

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Let’s get your trade completed

You have now hit the milestone for 10,000 EUR (or equivalent) in trading volume! As such, we are required by regulation to collect documents from you that prove the source of your funds is legitimate.

In order to have your most recently placed trade processed as quickly as possible, and to continue being able to trade in the future, please upload these documents as soon as possible. [Yes, they locked my account while the document verification process happened. It was completed in 5 days.]

Please upload the following documents to the link below:
Note: If you have received the crypto from a private individual (such as a friend or a relative), you will need to provide the same proof as below showing how that individual acquired the crypto. For more information visit our help center.

1. Bank Account
Your personal bank account statement that confirms you are the owner or co-owner of the account used in Coinify trades. [SP note–Fortunately, all of my crypto purchases came out of one US bank account. I sent them my bank statements for the last 3 months showing my work paychecks being deposited into that same account and ACH transfers to coinbase.]

2. Proof of address
Proof of address can include an utility bill or other document stating your name and address that is maximum 3 months old. [Bank statements, social security statements, drivers license all showed my address.]

3. Proof of crypto address
The proof must show the crypto address used to send coins to us. Screenshots from blockchain.com cannot be part of documentation, as they only show that you have received/sent crypto, but it doesn’t provide information on sender.

3. Source of your crypto

The source of the crypto you have been selling in the form of a receipt from the service/exchange you bought the crypto from e.g. a purchase receipt, a purchase confirmation, a screenshot of your withdrawal history or trading history etc. [SP note–Turns out, they needed me to submit the screen shots of each confirming email that coinbase sent me for each BTC purchase and each transfer. About 20 emails.]

And after having my Ledger locked by Coinify, it was opened again this morning.

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My conclusions:

1. Save all confirming emails from your exchange in a folder. You may need them in the future.

2. The trading, sending and exchanging cryptos was NOT scrutinized, only the conversion from crypto to USD triggered the investigation.

3. The exchanges are a privacy leak point.

The video above was especially interesting to me in the light of this experience.

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