Crypto Documents. What is it?
To make your crypto assets legal, many jurisdictions require you to provide documents proving that the assets were obtained legally. Also, to work with accredited centralized exchanges, you are required to provide documents proving the identity of the user. Let's start with them.
Financial organizations, including crypto exchanges, use KYC (Know Your Customer) procedures to verify the identity of a customer. Each institution provides its own list of documents to be provided. This list usually includes:
Financial organizations, including crypto exchanges, use KYC (Know Your Customer) procedures to verify the identity of a customer. Each institution provides its own list of documents to be provided. This list usually includes:
- Proof of identity - passport, driver's license, other national document proving identity, citizenship or residency
- Proof of residence - national registration document, utility bill or other document confirming residence in a certain place
- Business registration documents (only for business accounts of legal entities): documents confirming the existence of a business, such as incorporation documents, business licenses and tax registration documents
Proof of source of funds documents
Registering on an exchange is not always enough to make full use of crypto-assets. In some cases, it is necessary to confirm the legal source of funds for transactions. What can be used as proof of source of funds? The most common proof documents are bank statements, receipts, or other records that demonstrate that the funds were received legally and not spotted in illegal activities. Such documents may be requested by cryptocurrency exchanges, financial institutions or other organizations as part of their compliance with anti-money laundering (AML) and know your customer (KYC) regulations. You can easily generate such documents with the BitOK service:
- 1Go through a simple registration process
- 2Add your wallet
- 3Go to the documents tab and select "New document"
- 4From the list of documents select "Proof of source of founds"
- 5Select the sources of the transactions that you want to include in the document, period of transactions, document language and type of transactions
Your proof of source of funds document is ready!
Another document to verify the source of funds is a proof of source of funds letter. It is usually a written statement from the person who provided the funds that confirms that the funds were received legally and were not illegally acquired.
The letter should include the source of the funds, such as salary, inheritance, savings or any other legal method, as well as the name, address and contact information of the person who provided the funds and the date the letter was written.
The letter should also include the amount of money provided, be signed by the person providing the funds, and possibly notarized.
It is important to note that a confirmation of source letter is not a substitute for other types of proof of source, such as bank statements or investment statements, and is not a guarantee that the funds are legal. It is simply an additional verification step required by some organizations.
Another document to verify the source of funds is a proof of source of funds letter. It is usually a written statement from the person who provided the funds that confirms that the funds were received legally and were not illegally acquired.
The letter should include the source of the funds, such as salary, inheritance, savings or any other legal method, as well as the name, address and contact information of the person who provided the funds and the date the letter was written.
The letter should also include the amount of money provided, be signed by the person providing the funds, and possibly notarized.
It is important to note that a confirmation of source letter is not a substitute for other types of proof of source, such as bank statements or investment statements, and is not a guarantee that the funds are legal. It is simply an additional verification step required by some organizations.
Crypotax reports
If crypto-assets are part of your assets, it is logical that states require taxes to be paid - somewhere on profits, somewhere on the fact of ownership itself. You can read more in our article on cryptocurrency taxes.
Where there is tax, there should be a tax return. There are a lot of tax forms online in different jurisdictions. But it's more convenient to use a special software.- crypto-tax report importer.
Where there is tax, there should be a tax return. There are a lot of tax forms online in different jurisdictions. But it's more convenient to use a special software.- crypto-tax report importer.
What is a crypto-tax report importer?
A cryptocurrency tax report importer is software that allows users to import cryptocurrency trading data into a tax reporting or reporting platform. The purpose of this tool is to make it easier for individuals and businesses to accurately report cryptocurrency-related income and profits to the appropriate tax authorities. There is even a tool that allows you to generate a tax report for any jurisdiction in a couple of clicks - BitOK. It works easily:
- 1Go through a simple registration process
- 2Add your wallet
- 3Go to the documents tab and select "New document"
- 4From the list of documents, choose "Tax Report"
- 5Fill in information about the source of transactions, list of transactions and personal information
Your tax report is ready! Now you can generate a crypto tax report for 2021. When the tax year is over, you can generate a tax report for 2022.
How to use cryptoexchanges API to export transactions and balances?
Many cryptocurrency exchanges provide an API (application programming interface) that allows users to programmatically access information about their accounts, including trading history and current balances. These APIs can be used to export transaction and balance data in a format that can be used for accounting, tax reporting, or other purposes.
The BitOK service has step-by-step and clear instructions for transferring transaction information within most centralized exchanges, hot wallets and blockchains. You can see them by going to the "Connect API" tab. You can even set up live crypto transactions export. This is useful, for example, if you get salary or other permanent income in cryptocurrency.
The BitOK service has step-by-step and clear instructions for transferring transaction information within most centralized exchanges, hot wallets and blockchains. You can see them by going to the "Connect API" tab. You can even set up live crypto transactions export. This is useful, for example, if you get salary or other permanent income in cryptocurrency.
