Crypto investor with problem with compliance/source of funds!

[MrTambourineBTC]

Hey there!


I asked some questions about taxes a couple years ago and last year also. My situation remains the same but recently I've realized my biggest problem is not the tax man (plan on finally moving to Portugal from Spain end of this year so that from 2025 will be Portuguese tax resident), but bank compliance.

I have a bag of lets say, taxed money, 50k€, comes from donations.

And I have a bag of crypto money, 350k$, that comes from my activities in crypto in these last 3-4 years. I started with about 20k of winnings from poker (it was my job from 14 years, bought a house through a donation that I repaid in cash withdrwaing anonymously from BTC atms), and so those 15-25k$ initial were the leftovers I had when I went full into crypto.

I think the Portuguese tax is not that difficult.


My biggest problem I realize now is that the banks will ask typical questions such as: what is your income? show me a bank statement with a salary. where is the source of funds of these crypto winnings, and so on.


I have no idea how to solve this at all, so I think I would need to get somewhat creative. I also think the sooner I start the better cause otherwise the money will go to much bigger proportions and i will have a much bigger (good) problem.

Any ideas on how to approach these will be welcome. Never had a tax return, never had a "real job", never paid taxes on my poker winnings, so really to the real world I have no income, salary, or proof of wealth.

This is my first thread here in Jan '22:

There I explain I had a deal with a chinese guy that paid me in crypto,so it's not like I played poker in European normal poker sites. i was playing in Chinese apps with play money that then under the table meant real money lol

I mention there that I wanted to clarify my situation. I wish I had done it earlier!

https://www.offshorecorptalk.com/threads/crypto-taxes-and-farming-moving-to-portugal.36183/

 

[void]

Never had a tax return, never had a "real job", never paid taxes on my poker winnings, so really to the real world I have no income, salary, or proof of wealth.

good for you
now it's about time to build your social profile - every successful person should have a plausible and socially acceptable story to feed his neighbor with

 

[Marshal]

good for you
now it's about time to build your social profile - every successful person should have a plausible and socially acceptable story to feed his neighbor with

So many crypto millionaires nowadays

 

[MrTambourineBTC]

So many crypto millionaires nowadays

I mean the ones that are successful after 17' 21' or even 23' just keep compounding their winnings in a relatively easy environment so it's normal as more time goes on that there are going to be more millionaires. The compounding of winnings (unlike in poker) was one of my 2 main reasons to quit poker for crypto. Now it's coming to fruition but it's really scary to think about compliance. Wish I had thought about it in '20 it would have been 100x easier to justify origins of 20k than it is of 400k and that it will be of 1M....

 

[wellington]

Crypto isn’t winnings

And not exactly sure what “donations” are but if you’ve bought a house without any tangible untaxed income - even if you label it as a donation - you are already on their radar and probably rightfully so

 

[JackAlabama]

Hey there!


I asked some questions about taxes a couple years ago and last year also. My situation remains the same but recently I've realized my biggest problem is not the tax man (plan on finally moving to Portugal from Spain end of this year so that from 2025 will be Portuguese tax resident), but bank compliance.

I have a bag of lets say, taxed money, 50k€, comes from donations.

And I have a bag of crypto money, 350k$, that comes from my activities in crypto in these last 3-4 years. I started with about 20k of winnings from poker (it was my job from 14 years, bought a house through a donation that I repaid in cash withdrwaing anonymously from BTC atms), and so those 15-25k$ initial were the leftovers I had when I went full into crypto.

I think the Portuguese tax is not that difficult.


My biggest problem I realize now is that the banks will ask typical questions such as: what is your income? show me a bank statement with a salary. where is the source of funds of these crypto winnings, and so on.


I have no idea how to solve this at all, so I think I would need to get somewhat creative. I also think the sooner I start the better cause otherwise the money will go to much bigger proportions and i will have a much bigger (good) problem.

Any ideas on how to approach these will be welcome. Never had a tax return, never had a "real job", never paid taxes on my poker winnings, so really to the real world I have no income, salary, or proof of wealth.

This is my first thread here in Jan '22:

There I explain I had a deal with a chinese guy that paid me in crypto,so it's not like I played poker in European normal poker sites. i was playing in Chinese apps with play money that then under the table meant real money lol

I mention there that I wanted to clarify my situation. I wish I had done it earlier!

https://www.offshorecorptalk.com/threads/crypto-taxes-and-farming-moving-to-portugal.36183/

the thing is you try to optimize against a moving target.
Since they make the rules, you can never know how you should present it and most likely cannot out-comply it anyways.

Your residency is problematic since they like to confiscate wealth. Change that one.
Assuming in Spain you can just live like this unless you become overly flashy, it seems to be working for you.

 

[MrTambourineBTC]

the thing is you try to optimize against a moving target.
Since they make the rules, you can never know how you should present it and most likely cannot out-comply it anyways.

Your residency is problematic since they like to confiscate wealth. Change that one.
Assuming in Spain you can just live like this unless you become overly flashy, it seems to be working for you.

I cannot live like this, it's worked so far cause I was making a good living with poker but nothing too big, just a very comfortable life. Once we talking about mid 6 figs and potentially 7 living under the radar is simply not possible if you want to enjoy your money lol

Also I'm not too worried about confiscating wealth. Will split the money between banks/countries

My point is my main concern is not about crypto laws or what Portugal might do. I think it will be okay, and even in worst case scenario, could remain in Spain and pay 21-23% tax on my money which is not huge.

My main concern is "source of funds". If I continue like this my undeclared, unsourced money will keep growing.

What would you suggest that I could do to mix it with the legal money, or to make it legal, to launder it withouht raising suspicions?

 

[Marshal]

What would you suggest that I could do to mix it with the legal money, or to make it legal, to launder it withouht raising suspicions?

Find yourself a rich wife/gf and mix your wealth with hers

 

[GPT]

What would you suggest that I could do to mix it with the legal money, or to make it legal, to launder it withouht raising suspicions?

Just so you know.... mixing is already laundering.

For my understanding; if you win money with poker. That is legal money in itself. When something is paid to you, do you get some sort of a statement or something? I have no idea how that works.

 

[MrTambourineBTC]

Just so you know.... mixing is already laundering.

For my understanding; if you win money with poker. That is legal money in itself. When something is paid to you, do you get some sort of a statement or something? I have no idea how that works.

Yeah, like I mentioned earlier in this thread it wasnt the typical PokerStars games, those were sketchy Chinese apps. Poker is forbidden in china so they worked in a play money way, but in reality the players would handle the money to the managers of the clubs who would then redistribute the winnings. I had a contact who put the money for me and took about 50% of what I made. He sebt me weekly payments in BTC or USDT. I didn't know his face nor real name, just knew his nickname. Im sorry I didn't ask him for a receipt lol
Those where the best poker games I ever played (very high stakes and the players were meh), and at the time justifying the origin of the money was the last thing I was thinking about.

 

[GPT]

Yeah, like I mentioned earlier in this thread it wasnt the typical PokerStars games, those were sketchy Chinese apps. Poker is forbidden in china so they worked in a play money way, but in reality the players would handle the money to the managers of the clubs who would then redistribute the winnings. I had a contact who put the money for me and took about 50% of what I made. He sebt me weekly payments in BTC or USDT. I didn't know his face nor real name, just knew his nickname. Im sorry I didn't ask him for a receipt lol
Those where the best poker games I ever played (very high stakes and the players were meh), and at the time justifying the origin of the money was the last thing I was thinking about.

Ahh so you are one of those unfortunate ones that made legal money into illegal money and now want to make it legal again.
And the step from legal to illegal already costed you 50%. FML. Going back from illegal to legal normally costs around 15-25%.

Practically, everything up to 100k I would personally just cash out in Euro and use for lifestyle over the next years or so. Especially when you plan to move you will need some spending money anyways (furniture, rent, deposit etc). With everything you do from now, make sure to get receipts. Accounting is a thing you know...

In some countries incomplete accounting can get you a criminal record. Just so you know.

 

[MrTambourineBTC]

Find yourself a rich wife/gf and mix your wealth with hers

This would prob unironically be the easiest and cheapest way lol

Ahh so you are one of those unfortunate ones that made legal money into illegal money and now want to make it legal again.
And the step from legal to illegal already costed you 50%. FML. Going back from illegal to legal normally costs around 15-25%.

Practically, everything up to 100k I would personally just cash out in Euro and use for lifestyle over the next years or so. Especially when you plan to move you will need some spending money anyways (furniture, rent, deposit etc). With everything you do from now, make sure to get receipts. Accounting is a thing you know...

In some countries incomplete accounting can get you a criminal record. Just so you know.

No not really. I didn't put a dollar at risk. He was a very solid guy I met in the most incredible unexpected way, in a world full of scams, collusion and theft lol china without a good agent was risky business.

He risked the money in those shady games and put me in them and took half of my profit for 3 years. Very profitable association.

Yes I thought about even buying a land for cheaper with my 50k and what I can get on my house (another 150k prob), demolish the beachfront house and build mine all with cash like you mention. But either way I have to find a way to grow my legal money cleanly. Soon hopefully...

 

[JohnLocke]

And the step from legal to illegal already costed you 50%. FML. Going back from illegal to legal normally costs around 15-25%.

Some people just have to learn the hard way and pay It would have been much cheaper for them to pay taxes on that money instead of doing something illegal and getting so little out of it.

 

[JackAlabama]

Just so you know.... mixing is already laundering.

That is wrong. You cannot launder money which come from legal source. Even wikipedia states this.
Equally you cannot launder money which has not been taxed (given these are legal activities) since you have not received anything in this case (just some amount has not been taken away by the gunmen). However one can launder received tax cashbacks or vat reimbursements which has been illegally received.

However most likely OPs winnings come from illegal gambling or can be constructed as such, so we got that covered.

 

[GPT]

That is wrong. You cannot launder money which come from legal source. Even wikipedia states this.
Equally you cannot launder money which has not been taxed (given these are legal activities) since you have not received anything in this case (just some amount has not been taken away by the gunmen). However one can launder received tax cashbacks or vat reimbursements which has been illegally received.

However most likely OPs winnings come from illegal gambling or can be constructed as such, so we got that covered.

Read what I wrote and what you quote.

Mixing illegal money with legal money falls under money laundering regardless of what wikipedia says. Plenty of court cases have shown that. In the end when it came to the financial part, claw back / pay back, it often led to untangling the illegal from the legal so that only the illegal part was confiscated. Also, in many cases it became clear that part of the legal money was out of sight for a period of time. From a tax perspective that meant adjusted filings so that the tax man would still get their hands on a part of the legal money as well.

AML is an umbrella concept. Once someone is convicted the game begins of untangling and addressing what is what. You better have undeniable record keeping else even the legal money is at staken when its mixed with illegal money.

 

[JackAlabama]

Read what I wrote and what you quote.

Mixing illegal money with legal money falls under money laundering regardless of what wikipedia says. Plenty of court cases have shown that. In the end when it came to the financial part, claw back / pay back, it often led to untangling the illegal from the legal so that only the illegal part was confiscated. Also, in many cases it became clear that part of the legal money was out of sight for a period of time. From a tax perspective that meant adjusted filings so that the tax man would still get their hands on a part of the legal money as well.

AML is an umbrella concept. Once someone is convicted the game begins of untangling and addressing what is what. You better have undeniable record keeping else even the legal money is at staken when its mixed with illegal money.

exactly as written. you cannot launder legal money and I rest my case.

 

[jafo]

exactly as written. you cannot launder legal money and I rest my case.

Bruh, you are beyond smart! Do you know how many LAWYERS & JUDGES around the world get this wrong?
I wrote about it here: Re-introduce crypto gains to brick and mortar fiat bank

It's mind-boggling how many law pundits get this wrong! (I'm not even mentioning regular people here.) It's shocking! Good on you for having a solid understanding of a very obscure, misinformed, and DISINFORMED subject!

Kudos!

 

[JackAlabama]

Bruh, you are beyond smart! Do you know how many LAWYERS & JUDGES around the world get this wrong?
I wrote about it here: Re-introduce crypto gains to brick and mortar fiat bank

It's mind-boggling how many law pundits get this wrong! (I'm not even mentioning regular people here.) It's shocking! Good on you for having a solid understanding of a very obscure, misinformed, and DISINFORMED subject!

Kudos!

thanks, well its a great business and allows for many fees.

 

[void]

you cannot launder legal money and I rest my case

bringing logic to current world and dealing with states and their followers is a dangerous idea and it's not smart to bet on this card - don't forget that we are all guilty until proven otherwise

 

[jafo]

thanks, well its a great business and allows for many fees.

NGL, you schooled me here!
You came out of left field, and I didn't even see it coming
You are right!
All of a sudden, I realize I am the stupid one who doesn't understand sophistry & casuistry! Those judges & lawyers who "don't understand money laundering" are the real descendants of Machiavelli