10 year customer of UBS, where main salary is paid into with various savings accounts
Kraken account for crypto
Interactive Brokers account for stocks
At one point last year, I sold all my crypto and left the cash in Kraken.
When IB started paying good interest on cash balances, I decided to move all the cash from Kraken to IB.
But Kraken only allows you to transfer money out to an account in your name. And IB only accepts deposits transferred into an account that is in their name.
So I transferred the money from Kraken to UBS (in my name), and then from UBS to IB.
All fine, except that sometime later UBS contacted me to ‘clarify the transactions’ in the name of money laundering, etc.
All fine by me. They could see money coming from Kraken, and money going to IB. I explained why I did it this way, and was very transparent about it.
Now the crux: to ‘close the ticket’ they have asked that I provide them screenshots of my entire portfolios at both Kraken and IB, and also specify to them a detailed accounting of which, and how much crypto I used to own.
This seems to me like a crazy intrusive violation of my privacy to go from ‘clarify a transaction’ to show me everything you have at other (competitor!) institutions.
I have nothing to hide, and indeed do provide all this information already to the Swiss tax authorities.
So for me it’s just the principle of the matter. I would be pretty offended if at a Migros checkout it was demanded I provide receipts of everything I bought at Coop (or vice versa).
My question to the community: is this indeed abusive from UBS, or am I being unreasonable?
Difference being: Banks are legally required to monitor customers’ transactions, prevent and combat money laundering. Migros checkout? They aren’t even legally required to prevent you from stealing in plain sight.
Depends. We don‘t know how much you’re talking.
For a few hundreds of Francs? Probably overzealous.
For a few hundreds of thousands? No surprise here.
I think @Cortana could provide more details here, but in my opinion, if the amount transferred is particularly high (=higher than the transfers you are used to), I wouldn’t be surprised if it triggers a trigger on the bank side.
Now the question of wanting all the information also seems excessive to me. I find it reassuring that the bank is doing its job, I even find it normal that you have been contacted. On the other hand, I really wonder if it is a necessary control on the bank’s side or if it is a question of misplaced curiosity (in the sense of “can we offer equivalent services to this client within our establishment”; I mean the investment aspect).
Another question now would be whether the procedure would have been the same if the transfer had come from Swissquote or Yuh.
I understand your view and would absolutely not want to share such information with my bank too. But, you obviously (and rightfully) triggered their compliance. There is no law specifying what exact documents are needed in this situation, but UBS must make a reasonable effort to validate your statements. How else would you think you can prove your story?
Also, try looking at it from UBS perspective: You admitted to abusing them to circumvent anti-money laundering regulations from Kraken and IB (their competitors as you put it). You also made it clear that you do any interesting business with IB, and likely will never be a truly profitable customer for UBS. Their threshold to simply close your account if you fail to provide adequate documentation is probably quite low.
If anything, it Kraken’s and IB’s policies - not regulation that would compel them to instituting such restrictions. I‘m also seeing to anything that would in any way constitute abuse or circumvention of either!?
It sounds like a perfectly legal transaction - albeit one with very elevated risk, from the perspective of a bank, hence it may require providing explanation and evidence to satisfy compliance.
I may take a very hard point of view with my wording here, but yours seems to be on the other extreme end. Kraken and IB have these policies because of their relevant regulations. Limiting transfers to or from themselves to accounts with the same beneficiary is part of it because it allows them to share (or one could say transfer) the burden of anti-money laundering compliance with the counter party institution. And how you fail to even see the attempt to circumvent such regulations evades me, it is explicitly why the money was routed through UBS (the fact that a direct transfer wasn’t possible does not change this from UBS perspective).
To be clear: I in no way argue this wasn’t legal. I am just saying that one should not be surprised by the reaction from UBS.
It’s not misplaced curiosity. It’s just part of the whole AML process and legally required. OP can be happy they aren’t asking for full disclosure of everything including tax statements etc. because they absolutely could.
The comparison to Migros is just laughable. Banks are heavily regulated and they don’t do anything if not absolutely required or necessary.
You transferred money from a mostly unregulated financial institution to a Swiss bank and then directly transferred it again to an US broker. If this doesn‘t sound like total money laundering, I don‘t what else would.
Don‘t get me wrong, I believe your story. But in a bank it will obviously trigger hundreds of red flags. What happens then:
Client advisor of the branch you are linked to gets an urgent message to look into it.
He contacts you to verbally clarify everything.
Client advisor writes everything down and sends it to an AML agent or to the legal division of the bank.
They check the story and decide if it‘s necessary to provide documents to back it up. (In your case obviously not surprising). They get back to the client advisor with specific demands and a deadline.
Client advisor thinks „Damn, really? I have 10 other things I should do instead“. He contacts the client again and asks for documentation.
Now there are two ways how this will play out:
Client complies and everything is fine, case closed.
Client complies and nothing is fine or client refuses to provide more details → termination of account.
I am balking at the wording, yes. Particularly the „abuse“ and „circumvention of AML regulation“.
UBS would seem to be right in concluding the true nature and ultimate goal of the transaction: Making a transfer from Kraken to IBKR, and using the bank account they provide as merely a „pass-through“ vehicle to overcome the limitations imposed by Kraken and IBKR. This should rightfully ring their alarm bells.
I‘d rather call it use of - or as - an intermediary. With good reason: UBS is the only entity that identified the customer in person, unlike IBKR and (probably) Kraken. And I don’t see what would be legally wrong with that? Even though UBS probably won’t bear that burden and risk on a recurring basis at the fees @crossyTime is paying them.
Practically, I suggest you to open another main bank account and close UBS one. It’s not worth it anyway. If they won’t let you transfer your money to your new bank account, you can provide all explanations they want.
Second, I suggest not to use your main bank account for crypto related bank transfers. Use some free neobank account (Yuh, neon, N26) for this.
And why is that? I’m not sure he asked for advice on UBS, in that sense I see no reason to close the account, especially since the same thing could have happened in another bank. In my opinion it is better to be transparent in his case than to alienate a big bank.
I second the suggestion though. Since everything related to crypto is in a gray area in terms of equality from the banks’ point of view, I wouldn’t risk using my main account to make transfers to and from a crypto platform.
You are right, there is probably no rational reason to close an account just because of this story. I don’t know if you get flagged if something like that happens, maybe yes, maybe no, but I wouldn’t like the feeling of being watched and have to behave for the bank to let me have an account with them. It’s my decision if I want to have a business relationship with them, I am paying for it, and it’s not like there are no other banks in Switzerland. It’s up to the OP what to do, of course, but judging from the spirit of his messages, he doesn’t want to “behave”.
If you are happy with UBS fees, stay at UBS. TBH I’ll feel happy to get a phone call like that. It means they do their job.
The initial answer I got after reading the OP was to send all they want. If they want ot discuss your investments or just know what you do, well good for them, they might start to lower fees maybe or at the very least know that someone do care about fees.
I got flagged once or twice in my life, I don’t remember if it was Raiffeisen or Postfinance (or both). In my case a phone call was enough.
Regarding your case, I don’t understand what they want to accomplish with all that. Money laundering would happen at the Kraken’s side. Someone send BTC to your account and then you just get them out. Do they believe the IB account is not yours? Do they believe that a money launderer will just do 3 steps?
It’s just in case of Yuh, which is also involved in transacting crypto, it would be extremely hypocritical to not allow bank transfers to/from other crypto exchanges. So my guess is that they won’t block them.