Navigating financial compliance requires clarity on the legitimacy of funds. Two key concepts—Source of Funds (SoF) and Source of Wealth (SoW)—help ensure transparency in transactions. Here’s a breakdown:
- Source of Funds (SoF): Identifies the origin of money for a specific transaction (e.g., salary, asset sales, loans).
- Source of Wealth (SoW): Explains how an individual accumulated total assets over time (e.g., business profits, investments, inheritance).
Why Proof of SoF and SoW Matters
Regulated financial institutions must verify customer funds to comply with anti-money laundering (AML) and know-your-customer (KYC) regulations. Providing documentation ensures a secure trading environment and mitigates risks.
👉 Learn how to streamline compliance with verified financial documents
How to Submit SoF/SoW Documents
- Update your app to the latest version.
- Ensure document clarity:
- Full visibility (no cropped edges).
- Accurate, current details matching your income sources.
- Legible transaction amounts.
Accepted Proof Documents
| Income Type | Documents | Validity |
|---|---|---|
| Salary | Payslips, bank statements (3 months), tax documents (12 months) | Issued within 3–12 months |
| Business Ownership | Bank statements, tax records, accountant letters | Confirms active income streams |
| Investments | Brokerage statements, retirement account summaries | Shows portfolio growth |
| Crypto Assets | Exchange statements, tax records, wallet transaction histories | Must include wallet addresses |
| Inheritance/Gifts | Certified wills, notarized gift letters, bank transfer records | Legal proof of transfer |
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FAQ: SoF and SoW
Q: Why was my document rejected?
A: Common reasons include expired dates, obscured details, or mismatched names. Always submit recent, clear copies.
Q: Can I use screenshots for crypto transactions?
A: Yes, but ensure they show full transaction history and wallet addresses.
Q: How often must I update SoF/SoW documents?
A: Typically every 12 months or after major financial changes (e.g., large asset sales).
Q: Are gambling winnings acceptable as SoF?
A: Yes, if supported by tax records or official lottery statements.
Q: What if my wealth comes from multiple sources?
A: Provide documentation for each significant source (e.g., salary + investments).
Key Takeaways
- SoF/SoW proofs protect against fraud and ensure regulatory compliance.
- Use up-to-date, legible documents for smoother verification.
- Diverse income sources require comprehensive documentation.
For further guidance, consult your financial institution’s compliance team or visit trusted resources.