Topic: Do the big KYC exchanges care where your coins come from? (Read 647 times)

Are we entirely sure that they are going to do it to us as well? Have you seen Binance illegally froze anyone's account? I have mentioned that binance does stop these scammers and rug pulls and hackers and all that, we need to consider this to be the most important part. I mean we are seeing how things are changing right now, that has to be most important part.

I feel 100% secure about it and we are not going to get our account frozen, I personally believe I am fine with them, and I put my money on them because I believe we are going to not have any issues with them at all, that has to be the most important part. I understand you might fear it, and if you do then you could just avoid putting your money in there at all.

I dont even know if thats why I was banned from Gemini.  For all I know they banned me for using a vpn.  I dont know if the eth from Veil is clean or not, I used it one time to mix a small amount of eth.  And that eth never went back to any CEX, it was sent out as a payment

Freezing of cryptocurrency in exchanges tells you why we don't have to keep our cryptocurrency on exchanges because they're not safe. Centralized exchange which are custody exchanges are doing what they're supposed to do by clearing their names as associate to scammers and hackers that try to launder stolen cryptocurrency through their exchange. They have to freeze those transactions because they have the power to do that. Binance exchange have frozen lost of accounts that are connected to reported frauds although they sometimes freeze innocent accounts too and for those that don't have the required details to proven their innocents, they don't get their accounts back and loses all the cryptocurrency they owned. We should never make the mistake of trusting exchanges to hold out cryptocurrency.

The gate opens and is friendly when you want to join, but when you want to exit, it can be very different. You can not trust centralized exchanges to be friendly with you forever and give you access to their services without KYC forever. Many centralized exchanges shadily use KYC as their tool to freeze user accounts and funds too.

It's not new story and new warning, but it does worth to share it again.
Reminder: do not keep your money in online accounts

The less difficulty in terms of usage and when you make deposit, not when you make a withdrawal.

Banks and exchanges want whales to use them, hence they give special treatment for them and many promotions. But, when you want to cash out or withdraw your money, they will ask to wait for certain period of time, you can prove this after you become a millionaire.

This is not how KYC and compliance works. I am definitely not a millionaire, not even ever invested 1 BTC when it was 20k, and I had to complete all the checks once I hit $100 daily limit.

Trust me, the bigger you are, the less difficult they will make it for you. Banks and exchanges don't care. They just want to have the least problems for the biggest clients.

Big, small, all of them. I mean we have seen plenty of people who hack places, and when hackers put their money in exchanges, exchanges catch them and freeze their accounts, that is one of the most important parts of crypto, that's where we stop them whenever we can. Of course some of them are very smart, and use clever tactics to move money over and not get caught, but the ones who do, exchanges will freeze the account.

I have seen plenty of Binance account frozen because they used BSC to not only scam and steal from people, but even rug pulls as well, because rug pulls are basically stealing too, and too many project devs tried to turn their BNB into cash and got caught at Binance as well. So yeah, if you illegally take someone's money and they know about it, then they end up freezing your account. I am not sure if they actually pay the victims back or not, that part I am not sure about, but it's clear that they do something about it and not just ignore.

If you are just a shrimp investor then this is something that a huge in concern on where your funds do came from. They dont really care about on the funds on where its been from not unless if it will really be that a huge chunk or we do talk about hundreds of thousands or millions then there's a possibility on where they will be making out some checks. Pretty sure that this company is really that monitoring out where these big funds came from and to know that these are regulated platforms or business on which they are really that getting in line with government rules and regulations on which if there's something that they had missed or cant be able to provide then that will really be giving out that huge impact or problem into their business and this is something that they dont really like to happen. Just dont make yourself that being too confident because there might be some instances that they will be making out some checks, but so far on my experience i didnt have been able to meet up some issues but just like on what i have said earlier that dont make out some checks on small amount transactions and they will be accepting it out as long it will be not something that gets attention into. Whales or simply millionaires are the ones will really be having these kind of problems but for us who are just that small investors or fellas then they dont really just that care.

Yup, that was the past. Global exchanges used to operate without license, local exchanges must do licensing. Thats the main difference.

But I think now they all have to comply, so Binance had to pull out of many countries, and then when they came back in they probably had to do more KYC and Source of funds requests. Like I said tho I don't use Binance these days after the SEC lawsuit, so have no idea. But we all know from the court case Binance even helped people use false dox so who knows

They usually don't care that's why they don't ask you to always tell them where the deposits came from. They'll be concerned when the deposit gets flagged because the address was involved in a scam and it has been reported. Receiving coins from mixers can also be a problem as you'll be asked to show proof that you own the coins and it isn't a stolen cryptocurrency. Some exchange don't ask you for any proof but they will close your account unaware when it has to do with an address that has a high alert from the federal government through the SEC. Usually coins from mixers are the one that gets flagged the most. It's always good to not deposit directly from a mixer or casinos into an exchange but pass the transaction through your personal wallet so you can sign a message to prove ownership if the need arises.

Usually global exchange such as Binance, Kucoin or Huobi never care where are your deposit fund come from gambling account, bitcoin mixer wallet no matter and your account keep secure without freeze.
But difference with my local exchange market when detecting huge amount deposit will freeze awhile and must filling form about where are our deposit fund come from and must put the sender wallet for refund if get failure deposit criteria.

Seems deposit fund come from due local exchange regulation, maybe they won't avoid from money laundering and ask detail about fund deposit from and need to know about the sender. In my local exchange Indonesia want detect taxes transaction because huge fund deposit and its our regulation have been adopted last one year ago.

The very first response is correct, everything seems to be flagged for where it came from.

However, in my experience prior to 2023 which is when I really used Binance heavily, they never cared where it came from. Cause I definitely deposited directly from gambling, which supposedly in the terms I remember was not possible.

I don't know if they care now tho.

If they are no-KYC exchanges, they can not spend resources to analyze origins of users' coins.

If they are KYC exchanges, I am quite sure with you that they have automatic bots to analyze it, but it can be different procedures among exchanges. These KYC exchanges can have deep analysis to detect tainted coins from their users' deposits or they just have a simple procedure to deal with Compliance issues with governments and regulatory agencies.

No doubt that big exchanges especially Tier 1 Centralized Exchanges will have stricters procedures which are their self-defensive tools, because they're aware that they are most favorite targets of governments. Binance is an example, and they are favorite targets to shut down and many lawsuit cases as well as $B fees to pay to governments.

Bitcoin Q&A: Blacklists, Taint, and Wallet Fingerprinting

they do investigate from where the coin coming from sometime, I think they have automated system for this kind of thing.
KYC also doesn't guarantee you won't get your money frozen, as sometime they even demand more in-depth verification such as video call and so on.
I think most of exchange are doing exactly this because they have no choice but to comply to the regulation.
as for the smaller exchange that doesn't do this, they're just still under the radar, eventually they will.

This suspicion could lead to the funds being frozen because it is certain that CEX will investigate further if danger is found then they can take direct action.
Although I myself have never experienced a case where the funds were frozen or the amount was suspected by CEX because it was not a large amount so they did not conduct any investigation.

What has been frozen is the funds from the mixer and CEX detected it easily.

I have not make use of this exchange you mentioned above but I know quite well that some exchange does not do such investigations of where your coin is coming from but what I know that they can do is to ensure that you are a sincere someone by having your kyc done, because it is the kyc being your documentation that is necessary or important to every exchange because of scam once you are done with your kyc, I think that they have much to say or questions your deposit, because if their is any accusations against you, they have what they can tender to free themselves from the crime.

Of course they care but about the source not about the amount, because CEXs have to comply with the rules of the country where they operate anything suspicious can put them in danger.
Lot of funds coming from small exchanges can raise suspicions of big exchanges, because it is unlikely that a whale would trust their funds to a small exchange.

I think all centralized exchanges have mandatory KYC and this has been going on since years ago. They will always care where the money is coming from but in my mind, the chances of getting flagged are a lot higher when you are talking about bigger amounts (except for maybe Binance based on the comments here). Similar to when you would like to send money from the exchange to a bank account. They will monitor it but you will never really have issues if you stay below certain numbers (<3000 €). At least that is valid for my country.

Some bells ring a charm - so you better have something ready for the CEXes to come after you 
Maybe this time you will be luck, but the next - not so much.
And it's better to be legal, as you said.

Centralized exchanges has upgraded unlike then, ever since they started probing them of allowing money laundering, they have team up with some chain analysts to watch over transactions that goes in and out of some exchanges, if you are caught using tent coins or stolen coins that is reported and you deposit the coin to the exchange, consider the coin is bye gone because it will be seized and your account risk been banned too if found suspicious of been criminal.

What I know is that many centralized exchanges are now scared of funds that comes from mixing, many of them don't want to see coins that are mixed but free coins that has been move from one wallet to another. I remember Binance asked some users in this forum that participated in mixer signature campaign to provide some evidence of payment and proof because the funds were directly send to Binance, my advice is this; if you know that your coins isn't pure Utxo, don't send to any centralized exchanges to avoid explanations later.

Your experience shows that exchanges do care about the sources of funds that is deposited with them, most of us wouldn't know this because we've not been victims of blocked accounts. Perhaps the exchanges ordinarily wouldn't care about the sources of funds but because of the mandate of regulations they wouldn't want to be in between suspicious transactions, that is my take on it. Some months back Binance had an issue with my government regarding suspicious transactions, it reached to a point where a Binance official was detained in a correctional facility for a long time before he was eventually released.

In my opinion, about any exchange require KYC because following the government regulation or the exchange operation close totally if allow their user without KYC for trading, deposit and withdrawing fund. Recently many exchange before have limited amount for withdrawing or depositing before applying KYC but right now most of the exchange have change the regulation if want trade must pass KYC firstly.

For exchange have regulation about where are the money come from and verifying document ID firstly make easily for exchange detecting our deposit come from, the exchange regulation about KYC make us trade, deposit or withdraw fund without problem and the exchange have follow all government regulation. 

basically people should read the term that the exchange give first before doing deposit, binance seems to be quite strict with the rules mainly to comply AML.
but expect other exchange to have the same reaction as well in the future, this is why not your coin not your money, these exchange be locking up people's fund without valid reasoning so far and lately there's this hot topic about coinbase locking up people's fund in twitter even going as far as the account clarifying that it is just a fud (which more likely isn't because genuine people got locked out of their fund for real there).

always use exchange as needed and then use hardware wallet.

Yes they do care about where your funds is coming from. When it’s coming from a source that is already flagged for fraudulent activities, your funds will easily be locked or you won’t receive them. I have witnessed a lot of time if trying to receive money on binance in specific, it always prompt a message not to receive the money from sanctioned entities as it’ll pose a risk to your account. Even some exchanges that are flagged are not allowed to transact to exchanges that have putting an embargo on them, so exchanges have their policies and since they’re decentralized, it is better not to receive money from any source that is not accredited by them or have been flagged for fraud before.

The exchanges system automatically credits your crypto deposit. But if your transaction is suspicious then the deposit is frozen. Be it small amount or big amount. I faced such a problem. I made a NEAR deposit from a wall on Binance but it was credited but my balance was frozen. Later I contacted the support and after giving them all the detailed proofs they unfroze my balance. When I asked them about this they said that my transaction was suspicious due to which my balance was frozen. So it can be said that any exchanger can freeze your balance if your transaction is suspicious

They 100% care, without a doubt. I remember few of my friends got a message from binance asking them to explain why and how they are regularly receiving money from some places. They had to explain that it was because of the a campaign, and they let me be, but if they didn't have proof, then binance would have blocked their account.

While you may not get caught every time, that doesn't mean that you are doing something they allow, you are just doing something against their rules and not caught yet, that's it. So, they do care where the money comes from, depends on where it comes from though, if it's something illegal then they care, if it is not illegal then they do not care, that's the most important part of it, and I believe that matters a lot.

Any exchange that requires you to KYC, it means they care about the origin of your money. If they don't care about the origin of your money, are you a criminal? Why do they force you to KYC? It is true that exchanges need users to build reputation and revenue, but first, they need to survive and to do that, they need to comply with government regulations. That is why they always ask us to verify our identity and comply with their terms before using their services.

As for handling forfeited assets, I think everything is clearly stated in their regulations, it's just that most of us don't read them before signing up  .

No, whatever type of exchange it doesn't matter where you send crypto from, whether you send usdt, eth, btc and so on, even if you send it from an unknown exchange or any wallet, including gambling sites, they don't care about that, as long as you don't get the delivery address wrong, your crypto will come in.

Kyc applies not only to sending from an exchange to another exchange, kyc applies to the users themselves in, for example, Binance, Kraken or other exchanges, what is certain is that kyc applies to users who carry out activities on the exchange, whether you carry out trading activities, investments, withdrawalsor deposit.

Also, another question would be if there is a subaccount option on the said CEX.
Would all of them be frozen in such a case if the money were found to be suspicious?

Basically - might makes right.
And you would be screwed for a month or so if your funds would be stuck because these thoughts of being from a "shady" place.
So better to be vigilant, OP.

When you send a lot of ETH, USDT or any other currency, they care about everything because they don't want problems with governments. The best way to make yourself less noticeable is if you slowly deposit money on exchanges but if it's a big amount of money, $300K or something higher, I think you can't safely send it to any exchange, including most instant exchanges.

It's very hard for us to give you an accurate prediction because sometimes, everything is okay and the exchange still blocks your funds because their AML analyzer made a mistake. We don't know if their AML analyzer will make a mistake or not, you need fortune on your side.

Bestchange.com has an AML analyzer, which is very cheap but at the moment it's disabled. It might be a good idea to save this URL and check later - https://www.bestchange.com/report/

Why was this wrong? Can you explain? Did you receive dirty coins there?

Yes, they care, although the exchange arrangement is the one I know that takes risk for their client the most since I started online dealings. If it were to be other companies, you may not be able to hold $1,000 with them without duly proving the source of your funds. However, exchanges may tolerate some amount but when it is getting to a certain volume, they might tell you to proof the funds, especially if the KYT (Know Your Transaction) doesn't favour the person or it can't easily be implemented. But they may not have issues with you if you move out $1m from a well-known company's account. However, if it is suspicious, your account may be frozen for you to prove the funds.

As long you wouldnt really be able to hit up the threshold then it should really be just that fine but on the moment that you do go past beyond it then you would be able to expect that there would really be checks that needs out or on the moment tor time that you will really be asked out for some verification if ever they have seen something odd with your transaction. Actually there's nothing to worry about if there's nothing that you do hide on where those funds came from. If it turned out that you are a whale holder then you could always prove it out that it do came from your own wallet but if this one talks about on gambling source of funds then there's really some rules or terms about that on which we do need to look upon.

See for example:
(g) certain regulated products and services, including but not limited to marijuana dispensaries and related businesses; sale of tobacco, e-cigarettes, and e-liquid; online prescription or pharmaceutical services; age restricted goods or services; and toxic, flammable, and radioactive materials;
(j) gambling activities, including but not limited to sports betting, casino games, horse racing, dog racing, lotteries, games of chance, sweepstakes, games of skill that may be classified as gambling (i.e. poker), or other activities that facilitate any of the foregoing;

Source: https://www.okx.com/help/terms-of-service

These are only a couple of example with tons on the list. As long you dont put up yourself into these things then you should be just fine.

I think those things actually depends on the kind of exchange we are talking about because I believe there are even some exchanges that doesn't look into the amount people are sending to there platform because they need more users to boost there reputation but for those exchanges who have reaching to the level they want can do that because when they would see how big is the money and the age you are, they would eventually trace back the transaction to check if is linked to any illegal wallet that has been use for illegal purpose and if find connected will result to account blocked without access of taking back the money, however at this point of would like someone to explain to me what such exchange will do with the money since the depositors is longer accessible to the money, does it mean that the money will be liquidated, shared or hand over to the authorities?.

Exchange already have their own check's mechanism and the only time you could run into a problem with exchange is when the volume of the money is higher than your kyc level, this could trigger the exchange to Carrie out suspension on your account until you upgrade your kyc verification, and also exchange suspect fund's that are from illegal sources so for that, try as much as possible to always avoid sending money from gambling and other coins mixing services that debts the status  of the Bitcoin deposits.

Aside from all of that, if all your transactions are from clean source, I don't think you have anything to worry about on exchange deposit regardless of the level of the exchange or wallet you are sending the Bitcoin from, exchange not exceeding your maximum deposit limit puts you and your funds on a more positive note on an exchange.

So Note that large deposits always trigger's suspicion so to that makes sure to deposit all your Bitcoin in a much secured and below limit balance if you want to stay within the limit of you account on the exchange.

Well, omegastarscream already explained it all, and I guess that is the reason why it's very easy for those big exchanges to discover that funds coming into their platform is from a hack exchange, and immediately lock the funds from being withdrawn.

We must understand that technology have changed, and is still changing alot of things in and around our lives and finances, especially in this era of internet money.

Exchanges can easily tell if and when funds are coming into their platform from a mixer, and this is why it's absolutely wrong to deposit from to the centralized exchanges directly from a mixing platform, it's always better to mix and first send to your private wallet, and maybe to another private wallet,, and another, and another, and more before finally sending to the exchange, this is if the coins in question are clean anyway.

If they can prevent coins that comes from a mixer, then indeed that they can as well ban privacy coins like Monero but Monero and the likes are already involved in an issue even before. They are even get delisted on some exchangers. So some exchange won't deal with them as well, as they are afraid that they will be in trouble if they do so. If we are a supporter of those coins, there is still a way to trade them, including the decentralized exchanges as you said there.

@TerryW
If there is a future of crypto, that would be only be Bitcoin (nothing more nothing less). And Bitcoin is also known to be the future of fiats system.

Basically every centralized exchange really cares where your funds come from - that's why they ask you to go through KYC as well as KYT. If the source of your funds is deemed to conflict with their terms of service - then your account may be locked and your deposits may be frozen. This is of course in line with their plan to prevent certain individuals from using their platform as a place to launder money, whether the budget comes from hacking or otherwise.

You may need to know about why KYC and KYT are required on almost all centralized exchanges - even local centralized exchanges have implemented these rules for all their customers. But of course - this will vary from case to case.

I think it's not like that in my opinion and just from my knowledge of the centralized exchanges we're talking about that collect kyc. And I also think that these platforms don't care if the amount you transfer to other exchanges is big or small, whether the exchange platform you're transferring assets to is on a top listing exchange or not.

As long as they don't violate their policy, your account on their platform will remain in good standing with the assets they have, especially if their platform is regulated compared to other unregulated exchange sites.

Governments dislike privacy of their citizens and they try to kill Monero for many years. They ordered Chainalysis to break down Monero private transactions and even have a big prize for anyone who can do it.

Can You Crack Monero? IRS Offers $625,000 Bounty for Anyone Who Can Break Privacy of Cryptocurrency

You can love privacy, love anonymity and you can like Monero for private transactions, but it's only for very short term transaction, and not more. If you think Monero as a favorite coin for your investment portfolio, it is very risky. Governments can break down this private blockchain but if they fail, they can simply order legal request to centralized exchanges for delisting Monero. A future with no centralized exchange for Monero is not too far and it's not bright future for this coin, price will be affected.

yeah that's most likely the case.

but OP just mentioned a bridge and Blofin, as far as I know, Blofin is relatively new exchange, I've heard this one just recently but never realy looked into it too deeply. I think if truly where OP's money coming from is just from bridge or exchange like blofin, he'll be fine.
I think OP can just try to read the T&C of the exchange and see what kind of rules they imposed, as some exchange might be "quirky" in that regard.

best solution would be, as you said, send small money first and test the water. most KYC exchange usually have no problem getting deposit from smaller exchange like blofin though as far as I know.

It's not about how big or small the KYC exchanges, but any centralized exchanges are actually care where the coins come from especially if you deposit a lot. If you don't want an exchange that care with the source, you should use no KYC P2P or DEX which you can find on kycnot.me

Many countries and exchanges have banned Monero, if you think Monero is the future, the government already killed the future.

I just realized I still had pictures of what am talking about, you can see it above. Actually i didn't have any idea that the deposit was going to come from that source, I just filled the form accordingly.

Exchangers do have that specific rule and regulations about funds on which where these came from but so far i do send out some funds that came from gambling sites on which turned out to be that one of the prohibited sources on which you could be able to pass on, but so far i havent been able to experience some problems in regarding about getting locked or having that failed withdrawals due to some issues. This is why i do highly believe that this might really be just that only applicable or into those people who do make out some big deposits that do caught their attention? Pretty sure that there are really those depositors that do came from illegal sources or origin but able to pass by because the amount isnt really that significant on which it wont really be ble to turn up the alarm of such exchange.  . Im not saying that they do have that kind of shady behavior on trying out to choose those big deposits but it cant be denied that it is really that somewhat they do need to verify on where those funds came from specially if its already that too big. They will really be trying out to trace up everything as much as they could and if they havent seen something that violates their TOS then you do able to pass but if there's something wrong then expect that you will be able to face up some issues.

The fact that you are asking such a question indicates that you have doubts about the origin of the coins in your wallet. And since you have such doubts, it is better for you to refrain from transferring such coins to CEX. But if you can't do without CEX, then you should try transferring a small amount from your wallet and see how the exchange reacts to this.

Exchangers typically don’t care much about where the funds come from, but the moment they spot something suspicious, it grabs their attention. In recent years, mixers have been at the center of discussions about fraud and illegal activities. Because of this, they’ve earned a suspicious reputation, especially when you use the platform you deposited funds into as a converter too. For example, if you deposit, trade, and immediately withdraw the funds, it raises red flags.

To them, this is the normal doing of “scammers” or someone trying to hide their transactions. And let’s be real—many people do this, which is why it’s become such a hot issue. Large exchanges, especially those complying with government regulations, don’t let it happen ruining their reputation, as they have been working it hard for many years. 

Yes, they care and won't hesitate to lock your account. This X user's experience gives a typical example. Binance locked her account when she received Bitcoin from a friend. Here friend's account was also locked too.

they do care but they aren't as "caring" to the small shrimp compared to those whales with millions in their account, they usually only freeze account with millions of USDT and the time taken to resolve this one simple thing usually takes months.

if you go on twitter you'd see plenty of people suddenly getting locked out of their fund and mostly it's 100k++ and things left unresolved for months even years.

personally I believe the exchange don't really care if it's just about $100 - $500 and have seen fewer cases of people getting locked out of their account for that measly amount.

but as usually, if you're so scared of getting your money locked, just store it somewhere else maybe use hardware wallet.

Unfortunately, it happens. The dirty concept regulatory bodies are mandating is simply flawed. For instance, someone could always send mixed coins to your CEX deposit address which potentially could ring their alarm bells. In addition, we don't know how far in the money trail are they looking at.

Best you can do is lessen the risks as much as possible. I believe you've gotten enough advises for it.

Also, I've never heard of veil.exchange. Best to stick with reputable platforms for extra safety.

None of my coins are stolen or shady, the only thing I ever did “wrong” was to use this DEX called Veil.Exchange.

The exchange don't care for that moment but as soon as the destination wallet report your wallet address for stealing of funds or comprises, they will seize the funds immediately if you haven't used or withdrawal the money and if you have withdraw the money before the report, you account will be suspended with all your information given to law enforcement to track you down, this is the main reason why they ask you to do KYC verification in the first place.

If you are using a centralized exchange to deposit and withdraw funds, try as much as possible to make sure that your funds are clean as possible, if they accept mixed funds which I'm don't they would, mixed your coins before you deposit them to exchanges and if they don’t, don't try it. Rather, make use of decentralized exchanges to swap to other assets and then you can send it after to centralized exchange where you wouldn't have any problem later.

I think they care; the best thing to do is to avoid centralised exchanges. Anytime you want to receive a big amount of money you have not received such an amount before, you should use DEX when receiving that kind of huge amount of money to avoid complaining too much, because if you receive an amount of money that you have not received before or anything related to fraudulent activity, even if not fraud, they will think that is what it is, and they may request some information that you personally won’t wish to give, but because of the money that is in there, you must bring out some of your details to get access to the money. 


To me, asking for the source of money is not bad; you know there are many ways where huge amounts of money will enter someone's account, maybe from a casino or business or something related to that, not only fraud. They are not asking to know whether it is fraudulent money or not but just to be sure where the money is coming from, and I feel like it is a good thing, and also they are securing their reputation, which is not bad. 

So what did you do after? Did you tell them? And why won't you anyway, right? Lol. For some, they might only lie if the the truth is that it came from illegal acts, or a known criminal have sent you that, in exchange of some works. We are lucky if we will get an exemption and we might be extra careful next time. This is why reading before using a service is also important, so that we won't get screwed, especially if we know to our selves that we are not 100 percent clean. I see that casino is also in the restricted list but actually, many casinos now requires a KYC. So it would be better if they can now give an exemption to the most of it.

Is it that complicated? I thought some exchanges are not that complicated when it comes to filling in information about where the funds came from, or the sender's information.
Because some people might send from their own personal wallets to the exchange for trading purposes. Or gamblers who withdraw from casinos and convert it to fiat.
Actually, the exchange has the right to know the source of funds through the KYC process which is indeed required.

Exactly yes, I have my local exchange market called "Tokocrypto" require KYC for trading, deposit and withdrawing fund take care when depositing big fund where are coins come from. I don't know how stupid regulation with my local exchange every bigger fund depositing you must fill form and required needed from where are fund come from, who is the sender until where are the sender address?

Need more patience progress needed for every bigger fund deposit in my local exchange where ever deposit from CEX wallet or exchange wallet you must fill the sender data detail. I don't know how to make easy because withdrawing cash from my crypto assets need convert at local exchange due aware by using P2P transaction.

Yes, exchanges do care about the source of your funds, and if you are flagged as a high risk customer they could block your account and ask you to tell them the source of those funds and to prove its origins, and if you cannot do it then you are never going to recover your coins, so be very careful when dealing with exchanges, as sometimes even if you have done nothing wrong, you could be forced to go through this process and it can take you quite a while to get your coins back.

I explained the origin of the transaction and stated it that I was not aware that it was going to come from a source that is forbidden by them. From that same note, it was stated that "another deposit from the address will lead to account restrictions."

So how did you explain it.  I think I should
Be okay as my wallet didn’t originate from a mixer, but one of my wallets connected to it sent stuff to what seems to be a mixer.  So it was outgoing only not into the wallet.  The exchange is veil.exchange

Some exchanges, such as Kraken Germany, also do not allow the deposit of privacy coins such as Monero (and a large number of other coins). I assume that other exchanges will follow the example of Kraken Germany and also prevent the deposit of Monero.

Of course, you can still trade Monero on a DEX for BTC/USDT/... and then deposit them on the respective exchange.

This is why I think Monero is the future of crypto.

Just like the first comment already made everything clear to you @OP, yes exchanges actually do care about where your coins is coming from when it's deposited to their exchange. If your coins comes from a platform that they blacklisted such as mixer or casino, the exchange will definitely send you a notification asking to know the source of your assets or they will restrict your account and ask you answer their question concerning that deposit.

It happened to me once, the coin was withdrawn directly from mixer to my exchange wallet and they asked me to explain who sent the coins. They gave me a period of 7 days to respond else my account would have been suspended.

Unfortunately, this even goes so far that exchanges are now preventing the deposit of coins originating from mixers. In the case of mixers, this is still understandable under certain circumstances, but it also affects coins originating from gambling platforms, for example. I don't really understand this, just because I play on a platform (and was able to make a profit) doesn't mean that I received them illegally or from dubious sources.

Large exchanges certainly have ways to find out the source of funds. Especially if the amount is large enough and raises suspicions about where the large funds came from.
This can result in freezing funds and suspending accounts while the investigation takes place. But I'm sure criminals won't be that stupid to do it.
not only centralized exchanges but other centralized platforms such as banks or casinos also do the same.

Yes absolutely, all the major KYC exchanges will not allow you to trade coins from known thefts or illegal darknet marketplaces.

Don't send your funds all at once. Try to minimize it for as long as you can be but typically exchanges level 1 kyc will give you $1M of daily limit but don't get close to that or even half of it. Don't send lots of ETHs and USDTs there because there's really something that the exchange's monitoring will look after your account and trace them back even if they've got millions of users that does transactions everyday on them. Some scammers might approach you telling to help you out so be careful as well as you're already in their hot eyes when you've just said lots of cryptos you're about to sell.

The thing is, there is no one size fits all guidelines and tools for such things. Sure, there are general things like mixers being extremely high risk but there are other things that could trigger a background check as well that we may and may not know about.

Basically, every exchange could have their own ways on how to handle it so it depends on who's doing the checks. Hence, using said aml tool does not necessarily mean you're safe.

I could only suggest to try to lower the risk as much as possible. For instance, try to split your transactions into small pieces. This way, if exchanges freezed your account, only a portion of your funds is at risk.

Not in one way but if AML concerned,
Yup!
Most of the Exchanges follow the strict AML policy to operate within the country and for sure there's not doubt that big names Binance do care about from where the funds are coming and even they freeze funds if they are related to the major reported hacks based on investigation and mostly in first warning they give a chance to clarify about the funds as I know an incident happened with many users of forum where Binance asked about the suspicious fund's history.

As you mentioned that "when you send a lots of ETH or USDT" that's means there will be a huge amount that can be from also a hackers who stolen from exchanger or the money launder or funding for terr*orist organizations So if their blockchain transaction was suspicious and if the fund was big then the big exchangers always assume that an suspicious activity and then they will definitely ask for the additional document for that funds.

As far as I before in the forum an seized mixer signature participants was asked for the additional documents for that fund who get from the mixers wallet for doing their signature campaign on bitcointalk so in my opinion yes they cares for the suspicious amount as well the suspicious activity.

Because of Regulations they care, and that's why they require you do KYC,  but are most concerned or pay more attention when it a transaction that involves huge amount of money. I believe they do this without you noticing with the help of some sophisticated system and further may have  a team that also help to checkmate such transactions.

https://btrace.amlcrypto.io/

Is this an accurate way to know if my address is safe or not?  Any other scanners I can use?

So what should I do?  The wallet that might be tainted cause of using a mixer one time, just don’t send anything from that one to kraken? 

Need some advice guys.

They don't care from where it is coming as it might not matter to them from security wise but yeah somewhere for their reports and to advertise themselves they might say many people when withdrew their assets from Kraken they deposited them on Binance. Or from Blofin to Kraken (Never heard of Blofin before). I think they do care about the origin of the coin and its AML score like if the origin is from a tagged or a suspicios wallet like from some wallet which have black money or tokens hacked or scammed from others.

Many exchanges have no allowed the deposit from those addresses as they can block so they blocked them. You can't send even some obfuscating platform's output money on CEXs. They want to know all about you.

Some of the exchanges do care, and some of those doesn't really care at all. Some of those exchanges just pretend that they care but in actual they have no such mechanism to detect such coins.

Especially, the new exchanges who doesn't have proper algorithms won't be able to find suspicious transactions. But, it's risky to deposit huge amounts of coins to those exchanges because they always lack liquidity.

What proof do they require?  Seeing my tax returns for my income as well as the initial buys of the crypto from Gemini?  You say to avoid these kyc cex, but how else can I sell for fiat and then send to my bank account?

The source of funds would definitely be something they want to see. Where did the crypto come from? where did the fiat come from?  They can however and probably will drag this for a very long time (and we have seen many cases where this happens in the past).

So again, if you're not willing to provide any of this stuff to them or you just don't want to deal with the headache and end up making multiple Reddit posts about this matter on /r/CryptoCurrency, /r/Kraken or /r/Bitcoin, tagging them on Twitter, and opening a scam accusation in bitcointalk etc. You should probably just stay away. I know I wouldn't deal with a fiat exchange with large sums of money.

And then of course, if you're cashing out for fiat, you should probably expect a call from the bank as well. Unless you're used to transfer large sums of money and the bank is crypto friendly.

Well I am worried because I already got kicked off of Gemini.  But maybe they have more stringent standards?  I will be dealing with large amounts,  what kind of extra verification would they require?

I think you're overthinking it at this point. Exchanges do use sophisticated methods (Look into ChainAnalysis KYT, they used to have a proper page, but I can no longer find it) but simply using a mixer for example does not necessarily guarantee that your account will get locked. Pretty sure dozens, if not hundreds of people here have used mixers before.

If you haven't done anything wrong, you should probably be fine. But at the same time, if you're really not willing to provide any kind of information to Kraken or any other KYC exchange, then you should probably stay away from them completely. It's not uncommon for exchanges to block a transaction for "extra verification" especially if the amounts involved are big.

Kraken supports XMR, wouldnt it be best to just bridge to XMR or buy XMR on non kyc cex then send to Kraken?  That would be completely untraced to old eth wallets right?

They can be strict or soft with on-chain tracking to find Tainted coins.
Bitcoin Q&A: Blacklists, Taint, and Wallet Fingerprinting.

If you used a small non-KYC exchange, and withdraw it as your deposit to bigger exchanges, I believe that you will have no issue. The exchange from which you withdraw your coin must be not like a P2P exchange or mixers, if you don't want to have problems with your deposits. If you want to avoid risk, don't use these platforms as your temporary storage before you deposit your coin to a big exchange.

I use a lot of DEX but at some point need to get it back to fiat to send to my bank.  My funds arent shady but I do have a wallet that used a mixer one time.  Are all my wallets connected to that wallet considered tainted?  Thats why I am sending to smaller cex and bridges before I send it to the big exchange like coinbase or kraken



How can they track it to before the small cex?  The small cex has pooled funds in a wallet they all send to and from.

Possibly. A chunk of big or unbelievably big money let say $1m usdt in one transaction and the exchange noticed that your previous transactions arent like that of course they might do some follow up or asked you of some details. Better to send in smaller fractions or like what others said use some dex instead.

It is not about if the coins are too much but even if it is a small amount of money, the exchanges still have tools that track the coin past transactions. Make sure your coins is not linked with something illegal. There is nothing to be worried about if you are doing nothing wrong or illegal.

They have tools for it which their blockchain analysts can use for the tracking.

How can they trace the funds to the source before the smaller exchange or the bridge?  A wallet funded from mexc just shows mexc as origin right?  Not previous hops?

I don't think exchanges care about sending your coins from other exchanges. Exchanges only investigate the source of your funds when they suspect fraudulent activity or unusual transactions. In such cases, they may request additional verification beyond the standard KYC process. This is to comply with government regulations that require them to report suspicious accounts to the authorities.

Aside from that, exchanges generally don't worry about where you're sending coins from, whether it's a smaller or larger exchange. Personally, I use different exchanges for various types of trading, including both decentralized (DEX) and centralized (CEX) exchanges.

They care that’s why they are regulated and implement KYC to all their customers. You should use decentralized exchange if you don’t want any check like this.

@omegastarscream said above is correct so don’t risk your money if you knew that your funds came from shady origin/tainted.

I’m not sure what exchange Biofin is but it’s safe to avoid all CEX.

Exchanges do have whats called "Know your transaction" (KYT) implemented.

You can think of it as an automatic system that checks the source of the funds. Did it come from a mixer? a gambling site? an address linked to a terrorist organization, or maybe a hack of another exchange? etc. How much of a risk is it? High, medium, low?

A transaction from a bridge or an unknown exchange would only raise suspicion if the original funds you deposited to the bridge, were suspicious for example, or if the crypto platform has been involved in something shady.

When you send a lot of ETH or USDT to a big exchange like Kraken, do they care if its come from a smaller non kyc exchange like Blofin?  Do they care if it came from a bridge?