Imagine the scenario: you’ve just transferred the fiat (that’s proper folding money, in case you didn’t know), equivalent of, say, five Bitcoins, by SEPA, to a LocalBitcoins seller to do a Bitcoin transaction.
Soon afterwards you get a call from your Assistant Bank Manager wanting to know why you are transferring the money, and what it’s going to be used for.
Confirmation Code Give-away
Now bear in mind that there is not a lot about the transaction that gives the bank a clue that you are buying Bitcoin, except, perhaps, that your transaction confirmation code is something like A156bE23Mn which is the sort of random confirmation code you’ll get from a seller to put on the transfer, so that the seller can confirm the money is coming from you. So the bank’s been keeping an eye on this.
Why Banks Hate you Making Bitcoin Transactions
They see you’ve been transferring money to Belgium, Italy, Germany, Slovenia, all with strange transaction confirmation codes. They’ve been told to look out for that sort of thing to identify Bitcoin transactions or other crypto purchases, so now they know that money is leaving them, and going into crypto, and they don’t like it. The less money you leave in your accounts with them, the less liquidity they have, which means the less they can lend. If you take out €10,000, that’s €1,000,000 they can’t lend out because of their leveraging allowances. So you cost them the interest they’d make on that loan, which is a lot more than the withdrawal you’ve just made.
And basically that’s why banks don’t like cryptocurrencies.
But what can they do? Failing government regulation and banning, they can’t do much to stop you. Your money is yours to do what you like with. You could be buying a diamond necklace to give to your mistress, buying a flat, or planning a world tour. Or giving it to your boyfriend to bribe an MP. You don’t have to answer any questions about the recipient of the money, and you don’t have to say what you are doing with the money.
What You Can Do
A simple hint that if the bank doesn’t like you moving money around or making investments, there are plenty of other banks who’d like your money is usually going to be enough to keep them off your back forever. And basically, that’s why banks can’t stop Bitcoin transactions. They not only don’t have the right to even make the enquiry, but they don’t dare try to stop you. Not in the civilised world. And I’m excluding China and America from that definition of the civilised world…
But if you do get such a call from your bank, it would be a good idea to switch money into multiple bank accounts at banks that are all owned by different holding entities. And it’s easy now to open bank accounts in different EU countries. It can actually be beneficial when doing transfers from fiat to crypto, because if you have a bank account in, say, the UK, you can do a national bank transfer to buy Bitcoin from someone with a bank account in the UK, with lower costs than a SEPA transfer, and no currency exchange rip-offs.
Bitcoin Transactions Just Can’t be Stopped!
And you can always gradually withdraw money at cash machines, and meet at an Internet cafe (or somewhere else safe) to make Bitcoin transaction and transfers. Or use PayPal!
Tip: Always get proof that the seller has the funds before you transfer. Take a photo. Take a friend. Don’t meet alone in a car park! Get very good proof of ID. Bring your own ID.
Or you can use multiple credit cards, from multiple providers. Thus, you can make trails that are impossible for any banks to follow.
Be Clever, not Stupid
You can get very wealthy through reasonably astute investment in cryptocurrencies. And that’s the best way to go! Just don’t be stupid and try to launder money for someone or buy drugs with crypto. Because no matter how good you are at hiding your Bitcoin transactions, even though most banks won’t be able to follow you, GCHQ and/or the NSA is watching your every move. Fortunately for you, they don’t care what you do with your money, as long as you are not laundering money, buying or selling drugs, or funding terrorism.
Disclaimer: I am giving opinions in my articles. Sometimes they are controversial opinions. Sometimes they are contrarian. Sometimes they are disrespectful. Nobody gets my respect without earning it. Not chiefs of Central Banks. Not Presidents or Prime Ministers. Not countries. Not spy organisations. And definitely not banks or financial advisors. But I do give respect when it’s been earned. Bitcoin has my respect! Some exchanges have earned my respect, like Coinbase. The Trezor has earned my respect. But never take anything I say as financial advice, because that is exactly what it is not!
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