Topic: Where do bitcoins on exchanges come from ? (Read 193 times)

OP are you going to give away your bitcoin because you discovered that it has been used for illegal deals/transacts sometime ago before you got to purchase it! Nah I don't think so .  Cause if we are to go by that then many fiat money in our possession wasn't supposed to be as they must have been used for illicit deals moving from one hand to another before it got to yours. The concern shouldn't be wether the fiat or bitcoin I own has been used for illegal activities or not before getting to my hand but it should rather be on making a better usage of that which is
now in our possession as against any illegality that might have been associated with it.

many people sponsored to promote mixers are LIARS(greedy immoral people that want to use and abuse customers)
they only care about abusing their new recruits for profit and taking their clean coin and handing them dirty coin

yes coins can be classified as dirty.. sorry truth hurts

here is the thing if fungibility was a boolean answer yes/no. or if there was no taint analysis and no such thing as 'dirty' then there would be NO POINT in mixers. but the idiots pretending innocent people should use mixers while saying not to worry about what they receive.. are lying because they want to cheat those innocent people

if coins were all clean no one would need a mixer.. but ironically because these idiots are advertising them they know they need their coins cleaned because there is risk attached to their coins..

the other thing is that the sponsored schemers want innocent people to use mixers because if innocent people did not. then the only pool of coins being used by mixers would be the criminals dirty mixed with dirty still results i dirty

so in short dont trust the words of criminals asking you to hand them your honest earned coins and being handed their illicitly gotten gains..
if their illicit gotten gains were so legit then they would have no need to palm them off to someone else

so just avoid that crap


getting coins from legit services are deemed clean. especially from CEX as they have been vetted as part of regulation. and so exchanges dont put red flags on coins coming from regulated exchanges. but do red flag coins coming from mixers or services that swap AEC coins for regular pseudonymous coins

its worth reading regulators guidance to exchanges to know how exchanges treat coin analysis then you know what to do and not do

That is very difficult, fiat money (large amount) can be distributed in a couple of people registered n and exchange, but controlled by a central person.
That person exchanges dirty fiat money through multiple accounts to Bitcoin (via exchange) and then pools them on the same exchange. Then sell the BTC by p2p market of the same exchange.

I think most of the things you said don't really matter, just pick a legitimate exchange where you could buy a bitcoin unless you bought it on some suspicious exchange website put your money there that's the only way maybe you could buy a fake bitcoin. You don't need to know this kind of thing when buying Bitcoin, I mean I don't know if the Bitcoin I bought on an exchange or any market was used for any illegal activities. Does it come from a miner? Does it come from other people? involve in some illegal activities or drugs? I don't really know.

It's still just an exchange platform that we use so most of the Bitcoin just came from people as well so there could be a lot of transactions happening before it goes to an exchange, But it wouldn't really matter at some point if you put your bitcoin on the exchange address, and have a transaction all of the other transactions will not matter.

This is true, there is no such thing as dirty bitcoin, if criminals use bitcoins, it is behavior evil, dirty human behavior is not bitcoin's fault. After all, bitcoin is just a tool, a means for us to use, and everyone's purpose is not the same. Breaking the law or being legal is human behavior.

Exchanges act as intermediaries that create an environment for people to exchange with each other, and they are government-licensed organizations. So their job is to track and prevent criminals, so I think buying bitcoins at exchanges is safe for us.

As long as you can provide proof that you received legitimate coins directly from the exchange, then you do not have to worry about the origin of those coins. The Blockchain will show that you received those coins from a legitimate exchange and not from the source where they received it from.

Just to be fair..... if you get change at a shop and the change was previous payment from a drug dealer... would they charge you for drug dealing, if they traced it back to you?  (It is easier to show proof that you received coins from an exchange, than showing proof that you received cash as change from a retail store, because you have the Blockchain) 

Bitcoin on exchanges come from anywhere!

I don't understand what's make it important to know the original source of the coins when you're not doing anything wrong. There's no such dirty or clean coin, coin is a coin, as long as it's not run in centralized network e.g. BSC chain.

You make a good point here, it's stupid to use Bitcoin mixer if he's want to trade using a centralized exchange.

But I will not say don't use mixer because if he want to trade his coins using a decentralized exchange or direct P2P, he will not have any problem about the centralized regulation. It depends on each person reference to use Bitcoin.

When you receive money from the bank or any with someone, can you know if it's dirty?

The same on Bitcoin, you didn't know if that's come from a dirty or from a clean source, but if this is your concern it is very simple, use a centralized exchange which surely they're fully regulated.

If you obsess about this, you can use a mixing service to enhance your anonymity before sending your coin into your wallet.

Buying OTC from huge existing exchange and institutional investors, this is included the miners. No need to included criminals, they only have a mere of them.


By the exchange definition, dirty bitcoins are only considered if it has from hacked funds especially from hacked exchange, or simply if the bitcoin coin from mixing, and in other case from gambling platforms.

The kind of question the OP asked comes up with a little thought. Where do so many bitcoins come from? So many bitcoin exchanges are from small and large merchants and various mediums. For example when I send bitcoins to an exchange and those bitcoins are deposited in the exchange. Then any other person sending bitcoins will also be credited to the exchange. Here the exchange will only act as a third party to hold your bitcoins. And this bitcoin will be bought by someone like you like us. And the exchange authority will identify whether my bitcoin is valid or not. Here you can't detect if your bitcoin is valid or not.

The answer to your question should pretty much be "All of the above" based on the options you provided..
But for option number three, must it be drug dealers swapping bitcoin for cash and cash for bitcoin?
Are you saying that each time I buy or sell bitcoin on the exchange, I become or I'm seen as a drug dealer? Na, I don't think so..

Hmm, I don't know about other users, but for me, this is pretty much not important, I mean most exchanges use some mixing services, after buying and withdrawing bitcoin from an exchange, I don't think it's possible to tell which bitcoin was or is dirty and which was or is not.

It has become a thought that someone is holding a dirty coin, well, there's no way to know that it's become a dirty coin. What do you want? Take it directly freshly from the miners? They're ready to be sold if that's the case because I've seen people thinking of having the freshly mined bitcoins but that doesn't make sense. It's like just having the feeling of sensation that you've got it freshly mined than the one that has been in circulation since years ago, they're just both bitcoins no matter where it came from but it just so happens that these exchanges don't want them and are there really some ways of determining that based on their approach? I have no idea. Are they going to mind tracking all of the addresses where that "dirty" bitcoins came from if it's got like a thousand addresses being passed on? Bitcoin is bitcoin regardless of where it came from.

They come from the fees that are accumulated from all trading volume, and the purchases of BTC supply that the exchanges make with those fees. Most of the exchanges listed were launched some time ago, their liquidity is based on coins accumulated at extremely cheap prices which enables them to cater for very high volumes and thus, increase their holdings consistently via fees.


Why wouldn't this just fit under "other"? Do you really think that drug dealers are using centralized exchanges to conduct their business or that they are a top 3 category of exchange volume? We're in 2023, not 2013


There's no such thing. Dirty and clean coins are a part of an agenda to make some coins less valuable than others. That's not how it works. If you buy coins from an exchange, you don't have anything to worry about.

If you are hesitant to buy Bitcoin just because it is of unknown origin then I don't think you are familiar with the concept of buying and selling on a centralized exchange. I mean no matter where it comes from, whether it's manufactured by drug dealers, miners, or even thieves, once it's available on a centralized exchange, Bitcoins for sale can't be tagged or labeled and it's no longer your job to ask about it. Unless you request the exchange yourself. If your question goes that far then it is no different than the money you use to buy a piece of cake and when the cake seller asks: where do you get the money to buy the cake?

I agree, maybe the OP's concern is that he might used a fake exchange that are quite impossible since there's a lot of known exchanges that are not scam. Exchanges are the one who checks every addresses if there's something fishy happening in your account, for them to ban,freeze and your ip address. Of course if their any transactions succeed then it means that circulating of coins already happened. Just like in the fist money, which circulates in the market as long users use it.

OP, there is no such thing as "dirty" bitcoin. All bitcoin is the same, all satoshis on the blockchain. And the bitcoin on exchanges comes from anyone who wants to sell their bitcoin on the exchange.

You don't need to worry about whether the bitcoin you buy on an exchange is "legit" or "dirty." In fact, the whole concept of "dirty" bitcoin is overblown and largely a myth perpetuated by those looking to create fear and uncertainty around cryptocurrency.

First of all, while there have been some instances of bitcoin being used for illegal activities, such as money laundering or drug trafficking, this is no different from any other currency. The reality is that the vast majority of criminal activities still use cash, not bitcoin.

Second, the vast majority of CEXs have strict regulatory requirements that they must follow to prevent illegal activities. This includes performing KYC checks on their customers and monitoring transactions for suspicious activity. If a CEX is found guilty of money laundering, they can be fined and shut down by the financial authorities. In fact, the requirements for CEXs to prevent money laundering and other illegal activities are often stricter than those of many banks.

I think as long as an exchange is legitimate and trustworthy like binance and it has a large holding of bitcoins it can be said if it is safe to buy and store bitcoin on an exchange anyway.

       Then most people here already know where Bitcoin comes from, maybe there won't be an exchange here in this industry if they don't know where bitcoin comes from so that it can be sold and bought by their traders.

Lemme take Binance for example, there are lots of people who trades with it, since they have spot trading and future trading, margin.
There are lots of institution that have deposited lots of funds into these exchangers for the purpose of trading, I also believe that those exchange have people who trades for them as well. It's a combination of buyers and sellers that sum up the total bitcoin in those exchanges you are seeing while trading or trying to convert anyone coin to which you preferred.

^ bad advice above ^

exchanges treat mixed coins as suspicious which can trigger the very said investigations.
dont use mixers. you are more likely to not just be flagged for using a mixer,(real world regulations actually state using a mixers is a suspicious activity flag)  but also, end up giving into the mixer your clean coins and getting out dirty coins. so get hit twice by exchange monitoring triggers

..
anyways
coins coming out of a regulated exchange are deemed 'clean' as the regulators trust that the exchanges have vetted and established their customers as honourable to then treat coins coming out as clean

but coins coming from unregulated services come with some suspicious rating attached. the highest of which are known darkmarket sites/scams/thefts (blacklisted coins) and mixers/tumblers and services that swap anonymity enhanced coins for standard pseudonymity coins