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Back when Bitcoin was worth under 10 USD, a friend sent me 25 BTC as a gift.

Since that time, I moved them around different wallets and don't believe I still have the original wallet where I received them. I also don't have any hard proof that they were received as a gift (it was just worth about 250$ at the time).

I'm worried about AML laws. If I understand correctly, the wire transfer from the Bitcoin exchange (e.g. Coinbase) to my bank account could be deemed suspect and I would be required to provide proof of the provenance of the funds (reverse burden of proof). As I don't have such proof, I could potentially lose all the money and go to jail.

Are my worries legitimate? Let's say I withdraw them successfully, how long do the AML people have to investigate (e.g. is there a statute of limitation)?

PS: I'd be withdrawing to either my US or Canadian bank (I'm a Canadian citizen).

PS 2: I have previously shared that problem elsewhere and was told "why are worried if you didn't do anything illegal?". What worries me is that in case of AML, it seems that the prosecutor doesn't have to prove that a crime was committed.

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  • 4
    With $250K at stake, you must be kidding not hiring a lawyer to get it all done smoothly with warranties and instead asking random people on the Internet.
    – Greendrake
    Aug 25, 2019 at 7:44
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    The tax issues may be more relevant than AML clauses. If you got a $250 gift and you now sell it for $250000, then at this point you would owe capital gains taxes on the difference.
    – Peteris
    Aug 25, 2019 at 9:07
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    @Greendrake I was not asking "instead" of hiring a lawyer.
    – maxklein
    Aug 26, 2019 at 12:21
  • @Peteris thanks but I was already aware of that. It's much more clear how to handle the tax issue.
    – maxklein
    Aug 26, 2019 at 12:22
  • So, how did the story end? Some of us are curious :-)
    – Rodrigo de Azevedo
    Apr 11, 2020 at 6:25

1 Answer 1

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Your last paragraph asks for legal advice which is off topic here; you should talk to a lawyer. Having said that:

  • You may not be able to prove you owned the BTC when they were only worth 250 USD, but how far back can you prove you owned them? If you can show you have held them for a while it strengthens your claim.

  • Can you get your friend to testify about giving you the BTC? This is actually likely to be more help. Using software to prove you controlled the wallet that originally received the coins will require an independent expert to testify about it, but your friend can just give testimony that he gave you the BTC on or around a certain date. That is evidence just as much as your wallet.

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  • I could possibly get him to testify although he lives in another country. I do have old empty wallets lying around. That said, both seem like weak proofs since they are relatively easy to "fake" (e.g. someone could ask a good friend to testify, old wallets can be bought). I actually wrote Bitcoin software for a while.
    – maxklein
    Aug 25, 2019 at 7:03
  • I edited the last paragraph and replaced the "asking for advice" part with a question regarding the statute of limitation.
    – maxklein
    Aug 25, 2019 at 7:10
  • @maxklein Evidence is evidence. If you can sign a message with the key that originally received the money from your friend then that is strong evidence that you control the wallet, and you can swear that you controlled it then. If your friend can swear an oath under his local law then that is also evidence (all evidence is introduced by a person, and its the person that matters). However the real advice here is TALK TO A LAWYER FIRST.
    – Paul Johnson
    Aug 25, 2019 at 10:33
  • Thanks for clarifying Paul, I will.
    – maxklein
    Aug 25, 2019 at 12:29

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