Topic: Self custody a large amount of bitcoin without being a target? (Read 257 times)

Why you must sell small offers on the decentralized exchange? in Bisq you can sell all of your coins as long as there's a buyer who want to buy it, the bad thing is you need to wait more long until all of your offers are completed, there's no way if you want to find zero KYC exchange and hope your big offerswill be finished in just a day

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When you're admitting in the court if you're using mixer to protect your wealth, you're just kill the purpose of mixer and the situation is worse than you give KYC to the exchange since more people are know you. Not to mention someone might create your case become an article if the problem is quite big.

It's still KYC regardless of any level, some exchange even ask for ID photo for level 1 KYC.

Any country that accept Bitcoin as legal tender doesn't mean they're care with customer's privacy, AFAIK they have Chivo wallet and it's actually an exchange which need to verify your KYC in order to use it

I personally think you are over complicating the issue.... because a lot of large Bitcoin whales are using "self custody" methods to store their coins, without any issues. Just buy the coins in small quantities from different exchanges over time and push those coins through mixer services to several hardware wallets to get them out of the "system"

This way....  "red" flags will not be raised and you will not be singled out as a mark or target by people working with syndicates within centralized services. (You will look like an ordinary trader)

I will gladly explain myself in court, if they ask me why I used a mixer service.. because I have a right to protect my wealth. (I can also show the court that the coins I have ....has gone through the legal services and was not obtained illegally) 

For example, in my country, some exchanges have transaction limits according to KYC levels. The solution may be to do it several times if the transaction is large.

For example, there are 3 KYC levels, if we do not want to continue to the stage of higher KYC levels, then we can also make withdrawals in a regulated amount considering that we no longer want to continue KYC to the next level due to privacy risks.
Another solution may be to settle in a country that legalises Bitcoin such as El Salvador.

I think you are putting yourself in too extreme a case. If you accumulate all your wealth in bitcoin and it makes x10, why would you want to liquidate it all at once? It is normal that you would want to liquidate it partially for some expenses because there is no better place for your wealth than bitcoin. And even so, if we are talking about more than 1 million dollars in bitcoin, you shouldn't have a problem, it wouldn't be instantaneous but large estates always have solutions.

I don't know if you know Spanish. The owner of this channel has a company that specialises in tax avoidance.

CryptoSpain Oficial


I want to emphasise that tax avoidance is legal, it is not the same as tax evasion. According to him, there are easy solutions within the law for cases like the one you are talking about.

It's possible to want to comply with the law(declaring your purchases/sells/etc), with you just not wanting to submit AML/KYC documents to certain companies because of the privacy risks.

If you want to comply with the law, then why don't you want KYC? The government doesn't want you to hold bitcoins without their control, and you are not complying with the law yourself. Try with trading P2P at your locally, your identity will be less known using centralized exchange, you cannot be completely anonymous to everyone.

The issue you are facing is a common one among individuals who want to buy and hold Bitcoin for self-custody while also being able to convert it back to fiat currency in the future. There are a few potential solutions to this problem, but none of them are completely foolproof.
One solution is to buy Bitcoin through a regulated exchange that requires KYC (Know Your Customer) information, but to take extra steps to protect your identity and personal information from attackers. This could include using a VPN, using a different address or phone number than the one you use for other personal accounts, and using a hardware wallet to store your Bitcoin.
Another solution is to use privacy-enhancing techniques such as Coinjoin, decentralized exchanges, and other methods to obscure the origin and destination of your Bitcoin transactions. However, these methods may not be fully effective in preventing your Bitcoin from being deemed "tainted" by regulators or exchanges and may also be illegal in some jurisdictions.
Aantonop's solution of jumping k+1 times is also a valid one, as it makes it more difficult for anyone to track your transactions, but again it's not foolproof and it could also be illegal in some jurisdictions
Ultimately, it's important to weigh the risks and benefits of each solution and make a decision that you are comfortable with. It's also a good idea to have a plan in place for what to do in case your identity or personal information is compromised. It's also to consider that no matter how you secure your bitcoin, your house could still be targeted by criminals, so it's important to think about physical security as well.

P.S. consider living in places like el salvador, bitcoin lake or bitcoin jungle or other places in the future and never have to change your sats again.

That would be a solution, however that would mean setting up a business and putting in a lot of work. With a full time job and family, it wouldn't be doable for me.


That's actually one of the best solutions, but will it work for large amounts of bitcoin? Let's say I can accumulate large amounts of bitcoin by spreading out my buys for a long time in order to accumulate the amount I want (the offers usually are way below 1 bitcoin offers). However if I want to exit (sell the coins) some time in the future, when Bitcoin price has increase 10x or more, it becomes very cumbersome to do all these small sell offers on a decentralised exchange. Or how would you do this?


This would bring the same challenge as above (buying through decentralised exchanges) with the added risk of actually meeting someone. And even if I could do it by getting bitcoin from people...someday I might need to get a large amount of fiat again in a practical way. Small sell offers on decentralised exchange over a long period of time will not really be a viable strategy. And selling it on a kyc exchange could have the exchange freeze my funds depending on the taintedness of the coins. And also I would tie my house address to a large sum of bitcoin.


I have also had ideas like this i.e. to buy smaller amounts and send it to new addresses in my wallet in order to not draw attention to it. Then no one would be able to know that 1 person owns all these bitcoin. I guess that would be a quite ok privacy strategy. It will just take a while to accumulate, and maybe that's fine. But the day I need fiat, the bitcoin price might be 10x the amount or more. Then it will be quite hard to have a good exit (sell coins) strategy. The only thing you can hope for is that things have changed in a good way to facilitate this for large bitcoin holders who wants to exit in a private way


I just assume that if my house address is connected to my bitcoin purchase then bad people could get hold of this information either by being an employee (or knowing an employee) on the exchange or through the analysis firms which would also know. And the connection will probably be there forever. I don't like that footprint.

You are assuming that the criminals have access to the full database of centralized exchanges. This is unlikely, especially if we talk about big reputable exchanges like Coinbase or Binance. There's extremely low chance that they sell customers data to criminals. If a data leak would happen, it will be public knowledge and you would be able to react. This is why it's advisable to move funds after withdrawing them from exchange, use a mixer or other privacy tool. This way nobody will know if you still own the coins or not and you will further reduce the probability of getting attacked.

Most of the time people become attacked when they brag about crypto to people around them or in social networks.


Privacy has nothing to do with coin inheritance. If you bought coins on centralized exchange, withdrew them to your encrypted wallet and didn't leave the password or seed for your family to find, the coins will be lost. What matters is whether you created a plan for passing down your coins or not.

I usually use a local physical exchange. It's a place where you can come with your phone or a laptop and get coins exchanged on the spot. With large amounts of money you need to do KYC, but if you really want to avoid it there are ways to do it, like going there a few times, each time exchanging just below the KYC limit. The limit is a joke and both the sellers and the exchange owners know it, but they have to obey this or they lose their license.

My main sources of anonymous bitcoin are p2p purchases at an exchange and signature campaigns.

There may not be a silver bullet solution that perfectly balances privacy and compliance for a law-abiding citizen who wanted to do self-custody of their BTC and be able to convert to fiat while avoiding to be a target for attackers.  I believe it all goes down to the existing law and regulations in your country and understanding the trade-off associated with the possible different methods mentioned in this thread to be used.  I think it is best to consult a financial adviser or a lawyer to get a clear understanding of the laws and regulations of your country and also to know the risk associated with each option you choose.

Why not purchase the BTC through peer-to-peer instead? That way, at least only one guy gets a hand of some of your personal information — not a centralized platform that's pretty much a honeypot. Just make sure you're transacting with legitimate sellers.

If the amount is seriously big then should channelise your purchases via different services. For example, if I was supposed to buy 13 bitcoins then it’s but obvious that everyone will be curious about such high amount of bitcoin getting moved, stored to some addresses, then they will start keeping a watch on it. As soon as there is movement they will start making buzz about it and until the time it goes to final destination!

In such case I would segregate my purchases. I will definitely buy it from decentralised exchanger where I don’t need to submit any KYC. Since it is big amount I will try to buy it from different accounts + different connections and different exchangers. I will make purchase on different days too.

This will reduce attention from any big amount altogether.

Once I accumulate amounts I will get them freshly minted with mixer services.

I will follow same process to mix them. Small amounts, different days, different accounts etc.

Once I have them freshly minted, like unmarked coins I will start accumulating them on hardware wallet and store Forever or until the time to sell.

What do you guys think about this strategy?

You can try looking for a trader in your area, someone willing to sell you bitcoin for cash in person. Just remember to be safe, meet in a public place, take someone with you so you're not alone and won't become an easy target.

I got a few people interested in bitcoin and they told some of their friends and in the last 5 years many of them bought and sold bitcoin among each other. I also know a guy who is a localbitcoins trader and he is verified in many exchanges and makes money trading with people who don't want KYC. He charges them a bit more than they'd pay on a normal KYC exchange, but privacy has a price these days.

Why can't you ever get fiat again? I've been under the radar with decentralized exchanges since I acquired my first satoshi. Whenever I want fiat, I'm just selling some of that via it; the financial institution you use doesn't know you're selling bitcoin.

Is it legal to use bitcoin? It is legal to use a decentralized exchange? If both answers are yes, why don't you do what I'm doing?

Or just don't use exchanges that treat the currency as non-fungible. Every coin is of the same value. The k+1 rule isn't sure it'll apply, and you neither know what's k.

Perhaps you could use your fiat to purchase a shipment of products, then create a retail website and sell those products accepting Bitcoin, and fiat, as payment?

No single individual that sends you bitcoin will know that you received any bitcoin from anyone else other than the small amount that they themselves sent to you as payment.

You could offer a discount on products when paid with Bitcoin (and/or a premium on the price when paid with fiat) to encourage more customers to use Bitcoin instead of fiat.  When you run out of product, if you don't yet have all of the Bitcoin that you want, you can just order more product and continue to sell.

I really believe in bitcoin and have bought some bitcoin, for self custody, in order to learn more about it. But I’m having a real hard time buying a bigger amount for self custody, and it all comes down to 1 big issue:

Either I buy bitcoin by the book (KYC) and become a target for attackers OR I go the full privacy-route (coinjoin, decentralised exchanges etc), with the caveat of locking my family savings in bitcoin forever and not being able to get fiat again (we might want it for a future house, travels etc).

Is there a silver bullet to solve this for a law abiding citizen that wants to do self custode and be able to go back and forth between fiat and bitcoin, and at the same time don’t want to be a target for attackers?

I have heard the solution from Aantonop of doing coinjoin and jumping k +1 times if regulated exchanges check your last k transactions, in order to deem your bitcoin tainted or not. It makes sense, since if they check all history of bitcoin then no bitcoin will be taint-free. But I wouldn't trust my family savings on that actually working the day we need fiat again. I also might be doing illicit activities according to some laws against coinjoins.

And it's doesn't matter that I have my bitcoin in a flawless custody, since someone could still just show up at our house which would be a nightmare.

What's a real viable solution here?