Mortgage with crypto: how to verify your assets for the lender
Date: | Week 26 | Reading time: 7 minutes | Updated: Author: Tyler Dijst
In short
A mortgage with crypto as part of your deposit is quite possible, but the lender will want to see where the money came from. That is not distrust, it is a legal duty. If you can show the route from your first purchase to the sale, the question is usually answered quickly.
Paucitas is an independent expert firm in the Netherlands that establishes the origin and legitimacy of crypto assets, in hundreds of cases a year. Turnaround is from the same day to around two weeks, so your application is not held up unnecessarily.
Get in touch with Paucitas or ring +31 20 244 5774. In a free intake you will hear what your lender is likely to want to see.
In a nutshell
Your crypto gains are real, but the lender has to be able to check them. Paucitas records the route from deposit to sale in a report your lender, broker or conveyancer can follow.
You have found a home and part of your deposit comes from crypto. Then the lender suddenly asks: where has this come from? For many buyers that is an unexpected and stressful moment, especially with a completion date approaching.
In this blog you will read what a lender wants to see for a mortgage with crypto, where things often get stuck and how Paucitas helps.
Mortgage with crypto: why does the lender keep asking questions?
Under the Money Laundering Regulations 2017, lenders have to establish where your deposit comes from, known as source of funds. With savings from a salary that is simple. With crypto, the history is spread across exchanges, wallets and years, sometimes including platforms that no longer exist.
All lenders work under the same rules. A digital bank and a traditional high street lender ask essentially the same thing, even if the way they ask differs. So the question is not whether your gains are legitimate, but whether you can show it in a way that someone else can check.
Is your lender asking for evidence right now? Let Paucitas take a look with you. You can ring at any time, 24/7, on +31 20 244 5774.
Which 4 links does the lender want to see?
A lender wants to see an unbroken route from your first pound to the amount now available. Usually it comes down to four links that must connect:
- The deposit: from which account in your name you bought crypto, and when.
- The purchase: which coins you bought, on which platform and at what price.
- The custody: that the wallets holding the coins are yours.
- The sale: that the coins were sold and the proceeds went back to an account in your name.
If those links connect, a lender can follow where your money came from without unexplained gaps. It is precisely at the transitions between links that things often go wrong.
What if a link is missing?
That happens a lot. An exchange from 2019 that no longer exists, an export that was never made, or a wallet under an old email address. Do not panic. In many cases the blockchain itself still holds the evidence, even if the platform has gone.
Paucitas finds out which records can still be traced and fills in the rest from the public transactions. Paucitas also goes through documents, emails and other communication, so that a complete picture emerges, with a timeline and where each part of the assets came from, step by step. If access to an old wallet has been lost, Paucitas also looks at whether you can get back into it, only for a wallet that is yours.
An example from practice
A couple wanted to buy a house. Part of the deposit came from bitcoin he had bought years earlier. The lender did not accept his own overview, because the first purchases had been made on a platform that no longer existed.
Paucitas reconstructed the route from the bank statements and the transactions on the blockchain. Within a week there was a report the lender could check. See also what you can do if an exchange statement is rejected.
Paucitas takes privacy very seriously and never shares clients' personal details. This is a composite example: names, amounts and details have been changed. The situation is one we see in practice.
Why does an independent report carry more weight than your own overview?
You can make exports yourself and send them in, but that is often not enough. Loose printouts lack coherence, are hard to check and rarely match what happened on the blockchain. A bundle you put together yourself can also come across as selective, even when that is not the intention.
An independent report links bank statements, exchange records and transactions into one whole. It is written so that a lender, mortgage broker or conveyancer can assess it without further explanation. The conversation then shifts from "can you prove this?" to "this is substantiated".
What is in the Paucitas report?
- The route from your first deposit to the sale proceeds.
- Which accounts, platforms and wallets are involved.
- How the amounts connect.
- What is established and where any uncertainty remains.
Anyone can follow and understand the report step by step.
Does Paucitas give tax advice?
No. Paucitas provides the factual evidence of origin. The tax side, such as Capital Gains Tax on disposals, is for you and your tax adviser. HMRC explains the rules in tax on cryptoassets. The Paucitas report does help your adviser, because the figures are then established.
Who helps with a mortgage using crypto for the deposit?
Paucitas. We map the origin of your crypto assets independently, including across several wallets, exchanges and years. Paucitas does all tracing itself, without tracing tools. More on this approach is in proving the origin of assets and asset verification for your bank. What comes up at completion is covered in crypto money and the conveyancer.
- Costs: every investigation is tailored. You receive a bespoke quote in advance, which we go through together, so there are no surprises.
- Turnaround: from the same day to around two weeks.
- Contact: you can ring at any time, 24/7. We answer the form within 1 to 3 hours, and email within 24 hours, usually the same day.
Is your application ready or already under way? Get in touch for a no-obligation introduction, or ring +31 20 244 5774. The sooner you start, the calmer you can face the deadline.
Sources: Money Laundering Regulations 2017, regulation 28; GOV.UK, tax on cryptoassets; FCA, cryptoasset AML regime.
Do you have questions about this blog?
Feel free to get in touch with Paucitas. Paucitas can be reached by phone 24/7, including evenings and weekends. Through the contact form we usually reply within 1 to 3 hours, and we answer e-mail within 24 hours.
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Frequently asked questions about a mortgage with crypto
Can crypto count towards my mortgage deposit?
Paucitas sees that it can, if the lender can follow where it came from. Whether your lender accepts it is their decision. Paucitas provides evidence the lender can check.
Which documents do I need for a mortgage with crypto?
Paucitas usually asks for bank statements for your deposits, records from the exchanges and an overview of your wallets. If something is missing, Paucitas finds out what can still be reconstructed.
What if the exchange I used no longer exists?
Paucitas can often still find a lot, because the transactions stay on the blockchain. Paucitas reconstructs the route and fills in the missing link that way.
How quickly will I have a report for my lender?
Paucitas delivers the report between the same day and around two weeks, depending on how many platforms and years are involved. You receive a bespoke quote in advance, which we go through together.
Does Paucitas give tax advice on my crypto?
Paucitas does not give tax advice, but provides the factual evidence of origin. The tax treatment is for you and your tax adviser.
From Amsterdam, for the whole of the UK
Everything can be done fully online. Prefer to meet in person? You are very welcome at our office in Amsterdam, by appointment.
Paucitas is an independent expert firm based in the Netherlands that, for clients across the UK, investigates investment fraud and crypto fraud, establishes the origin and legitimacy of crypto assets and prepares expert reports for legal proceedings and compliance.
Your own situation
If you are reading this, you probably have a question about your own situation. That is exactly what Paucitas does.
The first step is contact by phone. You can book that call by phone or through the contact form, so you do not have to wait. In the call we look together at what can factually be established in your case and what Paucitas can examine for you.