I did convert it to cash. The problem is in the US you can’t suddenly have thousands of unexplained dollars when getting a mortgage or similar.

I guess I should have clarified: I didn’t directly give them crypto. I was using it to cash out and pay cash with. But I had to prove ownership.

You can use unexplained cash for mortgage in the US if you let it “season” for 60 days on your bank account.

Yes, but then it’s not considered unexplained anymore :)

Also I didn’t have the luxury of waiting.

If it's within 30 days in the US, there will still be an issue with provenance of funds.

Exacty.

> That rigamarole could have been easily avoid by converting the crypto to cash, which is trivial to prove is yours.

In US law this is a taxable event.

Paying for something with crypto is the same taxable event as converting it to cash. You can’t get out of that.