Source of funds concerns a specific transaction: where the money or crypto being transferred actually came from. Source of wealth concerns the client's overall wealth: how the person built up everything they own, through work, business, inheritance or investments. For crypto, a bank will often want both: the transaction trail for the funds arriving, and a plausible account of how the holder came to own that much crypto in the first place, including how its value grew.
Two different questions
Source of funds asks: which account, wallet or event produced these specific assets? Source of wealth asks: is this person's total wealth consistent with their life and activities? The FATF Recommendations use both concepts: establishing them is part of enhanced due diligence on higher-risk clients (Recommendation 10) and is expressly required for politically exposed persons (Recommendation 12). Banks in most countries, and private banks in particular, clarify both whenever a relationship or a large inflow is classified as higher risk.
Applied to crypto
Suppose you sell bitcoin bought several years ago with savings from your salary. The source of funds is the chain from the exchange purchase, through your wallets, to the sale and the bank transfer. The source of wealth is your employment history that produced the savings, plus the appreciation of bitcoin since then. A large gain is not a problem in itself; it simply needs to be shown with historical prices and the acquisition records.
The same logic applies when crypto is not the start of the story but the end of it: if you bought crypto with proceeds from a business sale or an inheritance, the source of wealth is that earlier event, and its documents belong in the file alongside the on-chain trail.
Typical documents for each
- Source of funds: exchange statements, transaction hashes, wallet addresses with proof of control, the on-chain trail and the final sale.
- Source of wealth: employment contracts or salary statements, company accounts or dividend records, inheritance documents, sale of property or a business.
- Both: tax returns over several years, which show income and declared wealth, including crypto.
Common mistakes
Sending only a screenshot of a wallet balance, which proves possession but not origin. Explaining the purchase but not the growth in value. Giving a general life story without the transaction trail, or the reverse. Answering with documents that do not match each other in dates or amounts, which raises more questions than it answers.
How Advisorn helps
Advisorn prepares a signed report that covers both the transaction trail and the wealth narrative, with verifiable annexes, and answers the bank's follow-up questions.
FATF Recommendations 10 and 12; Wolfsberg Group, Anti-Money Laundering Principles for Private Banking
Updated November 2026 · General information, not legal or tax advice on your specific case.