My exchange is holding the payout until I prove origin, which document does an exchange accept?

Which document does an exchange accept as proof of the origin of assets?

An exchange accepts no separate document but a substantiation that can be followed per amount, and Paucitas supplies that as an overview in which every line refers to a document or a transaction. Someone who sends in a single bank statement usually receives a follow up question; someone who sends in an overview covering the whole period receives that follow up question far less often.

In practice it comes down to a combination of documents. Purchase confirmations or order confirmations of earlier purchases. Bank statements on which the deposit to a trading platform is visible. Transaction hashes of the transfers between your own addresses. Annual statements, a payslip or a deed of sale if the assets come from there. Earlier tax returns in which the holding was included. And, where there is a gift or a loan, the underlying agreement.

What an exchange assesses is not whether you are a decent person, but whether the inflow into your account can be explained from the documents you supply. That is a verifiable question, and therefore a question that an overview can answer.

The background and the wider context are set out on the pillar page about proving the origin of assets.

Why a bank later asks something different from your exchange

An exchange tests your account, a bank tests your assets; those are two different files, and Paucitas therefore builds the overview so that both questions can be answered from it. The exchange looks at what comes in and goes out on that platform, over a defined period, and at whether that flow fits what you have stated about yourself. A bank that receives an amount looks more broadly: where do the assets as a whole come from, over which years were they built up, and does that match what is known about you.

That difference explains why you may have to supply something twice without anything being wrong. It also explains why it pays to set the overview up broadly in one go. An overview that covers only the last six months may be sufficient for the platform and falls short as soon as the amount moves on.

The European framework behind this is not a secret. The EBA describes the European rules for countering money laundering and terrorist financing, within which institutions investigate their clients and assess unusual patterns (EBA on anti money laundering). For crypto service providers the regulation on markets in crypto assets is added to this, the application of which is described by ESMA (ESMA on MiCA).

What an exchange precisely is and which role it plays in the chain is explained briefly in the glossary under exchange.

How an origin overview is built up

An origin overview from Paucitas follows a fixed structure, so that the reader on the other side does not have to search. The parts are: the question and the period, a list of the documents supplied, a chronological overview of the inflow with an amount and a source per line, the verification per transaction, a passage about what cannot be established, and a conclusion that limits itself to factual observations.

That structure is deliberately dull. An assessor at a platform or an institution reads dozens of documents of this kind, and what works there is an overview in which every line refers to a piece of evidence. That is also the reason the verification is stated separately instead of tucked away in an annex.

Paucitas uses no automated analysis software, in any role. The investigation is carried out by hand on the basis of publicly accessible block explorers. Every transaction and every transaction hash is verified one by one before it is included in a report.

What such a substantiation involves is worked out further on the question page about the substantiation of the origin of assets.

Case, a hold that turned out to rest on a missing year

Case. A private individual wanted to withdraw an amount built up over eight years. The platform held the payout and asked for substantiation. He first sent a recent bank statement, then a screenshot of his portfolio, and both times received the same follow up question.

In the investigation the inflow over seven of the eight years turned out to be well substantiated with purchase confirmations and bank statements. For one year the starting point was missing: a series of purchases at a platform that had since closed. What had been kept from that period were the transaction hashes of the outgoing transfers to his own address.

The overview described seven years with documents, one year with transactions without underlying confirmation, and stated that distinction explicitly. It was precisely that explicit mention that made the document usable: the assessor did not have to discover the gap himself.

The limit. Transactions outside the blockchain, such as cash payments or internal bookings within an exchange, are not visible in blockchain data; they are included only where underlying documents are available.

For anyone going through this as a private individual, the working method is described on the page for private individuals.

A platform that has disappeared makes the substantiation narrower, but rarely impossible, because the transfers to and from that platform usually left traces on two sides. On one side is your bank statement with the deposit or the payout. On the other side is the transaction on the blockchain, with a date, an amount and an address that belonged to that platform.

Those two traces together form a reasonable substantiation of a period whose confirmation emails have disappeared. What belongs in the overview is the statement that the underlying confirmation is missing and that the conclusion rests on the two remaining traces. An assessor reads that more readily than a firm sentence with no document beneath it.

What you can gather now and how long it takes

Start with the period and work back: determine from which year the assets were built up and collect at least one document per year that explains the inflow. A delivery list is provided per case, so that you do not have to search at random.

Data is supplied digitally or at the office. Per case a delivery list is provided which states what data is needed. Where necessary Paucitas guides the collection and delivery of that data.

A Paucitas investigation takes between one working day and two weeks, depending on the size of the file and the urgency. An urgent report can be delivered within one working day and in exceptional cases the same day. A regular investigation is usually ready within three working days. For files with many transactions, several wallets or missing history, the lead time rises to around two weeks. A surcharge applies to urgent assignments.

If the payout remains on hold despite a complete substantiation, the route your holding has taken past the parties involved is recorded in the investigation that deals with that; you can read about it in the related blog exchange refuses payout and what an investigation of your holding delivers. If you want to know which documents are needed in your situation, Paucitas will look at it with you: see source of funds or contact Paucitas.