Topic: Buying BTC - concern if been through a mixer? (Read 251 times)

I don't see people being concerned that 90% of us dollars are tainted with cocaine and other drugs, and nobody in banks are checking for this so why would bitcoin be any different?

Majority of the people don't care about the history of Bitcoin in their wallets, and only few centralized exchanges are pressured by regulators to monitor this with various excuses but I think it's all about tracking regular people.

I would not be worried about using P2P trading websites especially if you are dealing with someone who have good ranking and trading history, you can also use mixers like Chipmixer and make several internal transactions in your wallet to make it much harder for anyone to blacklist your address and coins.

It's not like the traders and investors are going to voluntarily go down that path if they can at the least avoid it. KYC is an inevitable force that will soon take over crypto world because exchanges are going to comply with the laws that govern them and we won't have any choice but to comply too.

The second post from OELEO is completely explained and being in a mixing company he knows that more than anyone else.

so best to follow His advice and your funds will be safe than ever.

Well that just isn't true at all. Pretty much every single coin I have ever used is "tainted" according to these nonsense algorithms, and I have never once bought or sold coins on the black market or traded my coins for anything less than the current price of bitcoin. Just because centralized exchanges buy in to these nonsense government regulations doesn't mean the entire ecosystem does. And thinking that not a single "tainted" coin ends up on an exchange like Coinbase is ridiculously naive. And what then? The coin magically becomes clean again just because Coinbase have handled it?

If every coin passed through a mixer or a coinjoin transaction was irreversibly "tainted" for the rest of time and worth "pennies on the dollar" as you suggest, then the bitcoin price would have fallen to close to 0 a long time ago.

I don't think about it too much. I used mixer so many time. Sometimes I think about my anonimity, my concern is make sure that the mixer is not a fake website. A long time ago I used mixer but that is a fake website, I loss a lot of btc. Few years ago mixer fee was cheap so when I want to keep my anonimity then I will use it. Few years ago I used mixer for my btc and send it to exchange site and there is no problem. Maybe government regulate some exchange site so KYC must be clear now. Honestly don't like KYC it is so tiring to do. I prefer like to use my time for something else. Anyway I don't use bitcoin for negative thing.

most exchanges will no longer accept 'tainted' coins, mixing taints coins

KYC rules by GOV, has said that 'tainted' coins have been used for criminal purpose, thus its sold for a lower value

Three kinds of BTC virgin block chain ( bought for cash/gold no records ) , fresh/clean (never been mixed), and tainted, the virgin are most  valuable and bought by chinese mafia directly from the big-miners, and the 'clean' coin exchanged by likes of 'coinbase', then the 'tainted' crap ends up on the black-market, sold for penny's on the dollar.

buy through centralized exchanger or through an AMM/Decentralized exchange its safer opinion if you scare your coin going through a mixer

That would be the dream. It would render all blockchain analysis completely useless, cause all these companies to shut down, and improve everybody's privacy significantly. Centralized exchanges already force KYC on everyone so nothing would change as far as using such an exchange is concerned

Basic privacy is a perfectly valid reason. I don't want a bunch of complete strangers tracking my entire financial history, building a profile about my earnings, savings, spending habits, etc., giving that information to the government, and selling that information to advertisers, political research and strategy companies, data analyzers, and more.

I have/will never encourage anyone to use centralized exchanges or any other service that will keep your funds in their custody (unless there is no other alternatives).
I thought OP was asking about CEX policies regarding this matter, hence my reply.

Then, they will lock your account and seize your funds and you can't do anything about it unfortunately.

I guess it is for some exchanges or wallets, without any valid reason I don't think you really need to used mixers at all since transactions could work well without these mixers in exchanges and wallets.

Just to be safe because I have some experience especially in a centralized wallet or exchanges you might encounter some problems if it comes from suspicious addresses.

It happened to me but not actually related to the mixer but when my wallet received funds from a gambling website it register as suspicious, and they lock my funds, maybe because they think that it comes to from an illegal fund.

I would not have thought of this, although I only buy directly from exchange, still I find  this very important topic, assuming this exchanges are into checking every btc transacted that must be a tedious work on their part, I know platforms like bisq and localbitcoins have many users and most likely this users are trading their btc on centralized exchange as well, this won't be easy for them.

Hehe what if almost every bitcoin trader, investor, and regular user would resort to coinjoin and mixing services? That would be a pain for exchanges that would flag these transactions. They cannot afford to block all of them so they would probably choose force KYCing all of their users. That would be messy but it will be good for decentralized exchanges.

But in even in these cases, you do not have control of your own coins. As you point out, you have to deposit them to a smart contract address, swap them for a pegged token, wrap them on another chain, and so on. In all of these cases, you no longer own bitcoin in your wallet which you can spend as you like. You only have to take a look at the ICO craze to see just how many coins or tokens had either accidental or deliberate fatal bugs in them, which led to the coin either collapsing or the owner using it to scam. My favorite example was a coin called Oyster Pearl (PRL), which was shilled heavily on the altcoin boards, on Reddit, on Twitter, etc., and peaked with a market cap of $200 million. Then the creator activated a piece of code which no one had noticed which allowed him to print 3 million brand new tokens out of thin air, gave them to himself, dumped them all immediately, and ran off with the profits.

Any time you wrap your bitcoin, or swap it for a token, or deposit it to smart contract, etc., you assume a similar risk.

First of all, why should I have to prove where my coins came from? The whole point of bitcoin is to not trust centralized third parties, not hand over your entire financial history on their every whim. Second of all, what if you can't prove it? What if I sold something to a friend or acquaintance for the bitcoin in question? Or what if I traded for them peer to peer directly with another person? No exchange history, no receipts, no screenshots, no bank statements, etc.

Exchanges should not be enforcing these completely arbitrary rules, and we should not be supporting exchanges which do.

I doubt a regular user can find out if his coins were mixed just by tracking the address history on a block explorer. Even the biggest crypto exchanges wich have a lot of resources cooperate with blockchain analysis companies like Chainalysis to help them with this.
Anyway, I don't think this is something to worry about if you can prove you bought the coins after it was mixed when the exchange asks you about the source of your funds.

Some defi allows that, and they are somewhat decentralized.

There now this new buzzword (defi) and people are thinking they are offering free money. They are not.

Your coins (eth) or a btc pegged token gets locked into a smartcontract and you will earn interest, from 6 to 100% per year.
But as you pointed out, that money is not for free. You are ezposing yourself to many risks: smartcontract risk (a bug may lead to losses), token risk (stable coins or wrapped btc might no be pegged ) or even a scam.

There are some defi which are scam. Even in a decentralized smartcontract the code might be malicious. Open source code means nothing until it is audited by someone.

Personally, I hold my btc in my wallet , I never get any interest from it  and iam very satisfied with the price performance. No need for 6% interest rate for more risk.

No one knows. It is completely arbitrary, and no exchange tells you exactly what they look for, and not just when it comes to mixers or coinjoins. Some look for coins with a history of casino or gambling site use. Some look for coins coming from various marketplaces. Some exchanges decide that certain patterns of deposits and withdrawals are shady. Some think that certain trading behaviors are shady. There are thousands of reasons exchanges will lock your account or freeze your coins, and they never tell you why. Just that you have triggered some unknown algorithm, and so now you have to hand over all your personal information to unlock your account. There are thousands of reports you can find on here, Reddit, Twitter, etc., of people who have had their exchange accounts locked for no known reason. This is part of the risk you take when you use centralized exchanges. Not your keys, not your coins.

If you want to day trade, then sure, you need to use a centralized exchange. But trading bitcoin for altcoins just to own or hold is one of the strengths of decentralized exchanges, in that it can be done completely trustlessly and instantly without ever having to deposit your coins to an exchange's wallet or give up your privacy.

what are the advantages of buying from a mixer site? It sounds like illegal not even in the market. Why don't you buy it for a carn? it will make you more confident with your balance and it's definitely more legal and reliable.

If you buy Bitcoin only to invest in Bitcoin. You can sell it on the same marketplaces you use to buy it.

If you want to trade your Bitcoin, you will have to send it to centralized exchanges that have better trading volume. If you do it, you must read their rules on Mixing, mixer, tumblers or Coin Join transactions.

If their rules have points for mixers, tumblers, Coin Join transactions, you must be careful and don't take risk. If you want to deposit, do with part of your Bitcoin amount.

You can check your transaction hash with
- https://blockchair.com/bitcoin
- https://blockstream.info/
If your bought transaction is a Coin Join one, these block explorers will show details.

Reminder. Use block explorers to check your txhash will break your privacy.

How far back are the Exchanges going to go back into the transaction history to enforce that requirement?  All coins are going to go through a Mixer eventually, so the Exchanges should then "ban" people's accounts, if the transaction history shows any mixing of coins and that will kill their business. 

I am registered with several online platforms where you have to deposit coins and then withdraw it, so I just flush the coins through these legitimate services and then Exchanges have no problem with it. (Obviously if these services use KYC ... you will be identified) 

You can certainly track your coins back using a block explorer looking for signs of mixing or coinjoins (the latter being easier to spot than the former), but if coins have come from multiple sources, have been split/combined with other coins, or have been moved through other services, then it can be very difficult to tell.

They are easier to use. Once you have signed up and completed KYC, then they are generally as simple as either funding your account with a bank transfer or credit card and hitting the "buy" button. With decentralized exchanges, you have to find someone else you want to trade with manually, they deposit the bitcoin to an escrow (usually), then you figure out how to pay them in fiat, and then they release the coins from escrow. It is more complicated and takes much longer than with a centralized exchange. The advantages are you don't have to trust a centralized platform with the security of your coins, and you don't have to compromise your privacy.

I'm not aware of any decentralized platforms which allow you to keep control of your own coins while also earning interest. These centralized sites which offer interest do so by taking your coins and predominantly lending them out to third parties and collecting interest on the loans. Since they are completely unregulated unlike fiat banks which also lend out your money, you are accepting a significant degree of risk by using them.