What is the difference between source of funds and the origin of your assets?

By R.T. (Tyler) Dijst, blockchain investigator at Paucitas

Paucitas is an independent expert firm in the Netherlands that investigates investment fraud and crypto fraud and establishes legitimate crypto assets.

What Paucitas does

On a source of funds question we trace one specific payment: which amount, from which address, bought with which money and when. On an origin question we reconstruct the build up of the holding as a whole, across years and across platforms. The step that is most often underestimated is the distinction itself: people answer the wide question when the narrow one was asked, and the file becomes harder to read rather than easier.

Reading the request carefully therefore comes first. A Dutch bank asking about one incoming transfer wants the narrow answer, while the tax authority asking about a year wants the wide one.

On a source of funds question we trace one specific payment: which amount, from which address, bought with which money and when. On an origin question we reconstruct the build up of the holding as a whole, across years and across platforms. The step most often underestimated is the distinction itself, because people answer the wide question when the narrow one was asked.

What you supply

You supply the question exactly as you received it, because the wording says which of the two it is. Beyond that, the exports, the addresses and the bank statements that belong to the period concerned.

Alongside the request itself we need the exports, the addresses and the bank statements for the period concerned. For a source of funds question that period can be a single week; for an origin question it is usually several years.

What you receive

For a question about one payment you receive a short report with the route of that payment, the source references and a conclusion in plain language. For a question about the origin of your assets you receive the full file with a timeline over the whole period.

Both are built on the same verification, so a narrow report can later be widened without the work being done twice.

For an international reader the practical rule is simple. A Dutch bank asking about one incoming transfer wants the narrow source of funds answer. The tax authority asking about a year wants the wide one. Both rest on the same verification, so a narrow report can later be widened without the work being done twice.

A short report on one payment runs to a few pages: the route, the source references and a conclusion in plain language. The wide report carries a timeline over the whole period and the same source discipline per line.

How to get started

You contact us and send the question that was put to you. We will tell you which of the two it is and what that means for the scope. A short message through the contact page is enough.

Send the request as you received it and we will tell you which of the two it is. That single reading usually saves more time than anything else in the process.

If you are unsure which you have been asked for, forward the wording. Guessing costs more than asking, and the wrong answer tends to invite a second and sharper question.

How does an expert verify the origin of assets?

Verification is not an opinion but a series of checks someone else can repeat. We start at the end point, the euro in your bank account, and work backwards: the payout from the exchange, the sell order, the address the tokens came from, the earlier movements between your own addresses and finally the first purchase with money from your bank account.

At each step we test three things: does the blockchain transaction match in amount, time and direction; does the line in the exchange export match it; and can the address be attributed to you. Where a link is missing, that goes into the report as an open point, with the reason. That lets a bank, civil proceedings or a regulator follow the reasoning without having to take our word for it.

Which of the two substantiations is sufficient in your case is decided by the party asking the question.