Bitcoin Forum

Well, I am just asking.

Do you consider this important? Usually when we request some payment in bitcoin, we don't care where those funds comes from. But what happens when some of us try to cash out that balance through some CEX to your bank account

I've readed histories here where people get their funds stuck for weeks or months and that would be frustatransing.

So again the question: Is it important to check addresses for AML before doing transactions with it?

Most of the AML checks services offer only a few checks per month, why?

Obviously if we don’t have any plan to cashout that balance we don’t care much about AML checks.

Is there some free unlimit service to check for AML?

What are your thoughts about this?

Regards!

If you’re unsure or you’re having doubts from where the coin will be sent then the best thing to do is to basically use a new bitcoin address and then possibly try to mix this coin on a mixer and from there you can exchange it any exchange. Although there are some exchanges that do place restrictions on coins received from mixers because some of them could be tainted. This way even if a coin is tainted and wants to be traced it will be hard to trace it direct back to you because that particular bitcoin address that received the coin was the only thing linking it to you so without actually reusing it or consolidating your UTXO together with other addresses it can be traced to be yours

It is important to check if you plan to trade with centralized exchange. If you also plan to use a CEX you should also be cautious when using a mixer service cause they are flagged by some exchanges.

You should also not worry about it if you plan to trade with a decentralized, P2P exchange.

There's no such service and there can not be such service, because even effective chain analysis is not possible, an AML is a step above chain analysis, because it requires to also understand the nature of transactions and their connection to real world transactions.

CEX are doing AML by asking about the source of your coins. If they find your story implausible, they might freeze your account. If your coins are connected to gambling sites or darknet, that would likely trigger automated suspension.

Do not sell bitcoin in CEX and you will be fine.  The only way to make AML and "coin scoring" disappear is if we stop using the companies that enforce them.  These are CEX.

Useful link: https://kycnot.me/search?type=exchange

I would also say that it is important to check the address before doing transaction because if it is checked and your address have transactions to that address then you might get involved in money laundering even though you didn't launder any money at all. Well, you don't want to get involved in anything that you didn't do that is illegal right?, Then checking addresses should be important to start with.

This is not smart. Most likely the coins where they receive are not tainted. But if you use a mixer then there is a great chance your exchange account will be frozen because they will suspect you are doing something fishy.

There isn’t too much illegal or money laundering going around in crypto, especially in small amounts. If you receive $100 in crypto from someone, it’s most likely legit. If you send thru a mixer then most likely the exchange will ask questions.

Yes it Carries the risk and that’s why I said if the OP has strong suspicion that the money is probably tainted then it will be better he does get it mixed and also receives in an address he will never make use of again and as you have said if it is a small amount then even if it comes from mixers it wouldn’t incur any suspicion. This could be the only way except if there is another way out of this.

Even you check the addresses and trace back to the first sender, you still can't know who own the address except it's come from a big casino, exchange etc. IMO it's useless to check the address before you want to receive your coins, when you can easily solve it by using decentralized exchange or no KYC P2P.

Keep in note: most of exchange will flag your account when you're deal with big amount of money, for small amount money you're fine.

I’ve seen some references to services, though none seem to be free (or are limited to a couple of addresses at best, such as one site mentioned here (https://droomdroom.com/best-crypto-wallet-checkers/)), though I’ve no notion as to how professional or significant they are, and one should probably think it through before providing their IP/addresses to check to any (random) site to begin with. One consideration is that there is probably no industry standard, which could lead to a given address being flagged by one service provider and not by another.

A year ago or so, I took at look (https://bitcointalk.org/index.php?topic=5332730.msg60818489#msg60818489) at what General Bytes (bitcoin ATMs) does in this sense, when talking over something or other on our local forum. According to their documentation (see  here (https://generalbytes.atlassian.net/wiki/spaces/ESD/pages/966656131/AML+KYC+Settings) and here (https://generalbytes.atlassian.net/wiki/spaces/ESD/pages/972193910/Transaction+Scoring)), their scoring comes from APIs provided by CipherTrace and/or Chainanalysis. These may therefore be good underlying service providers to search for, besides there being no seemingly standard.

To this effect, at least Chainanalysis seems to have a free API that you may manage to wiggle into them providing you a key to (I think it’s meant for professionals, but I’m not sure how much they’ll dig into that). Could be worth a try:
https://www.chainalysis.com/free-cryptocurrency-sanctions-screening-tools/

The said API does seem to be based on sanction lists, but I haven’t seen how it deals with addresses that are N-steps away from one of such addresses.

If you transfer money from the CEX platform to your bank account, I think you will have a problem with the bank when the money from the CEX platform comes in. Because the bank may ask you where the money you entered from a centralized cryptocurrency exchange came from.

I have a friend who always does that, but later his bank account was suddenly put on hold because the bank saw that the money he was depositing came from the CEX platform. What's even worse is that they suddenly freeze your account. Even though my friend had documents to show, the bank still suspected him.

Just choose a CEX that doesn't put that burden on your shoulders. It's not your duty to investigate the source of your money. Do you check each banknote you receive whether that has traces of cocaine or not? No, right? So, if any bank asks you to check it, you know that easy solution is to change the bank.

Usually, blockchain analyzes companies are paid services and they partner with businesses, not with individuals. Plus, they aren't reliable and often make mistakes.

If you know where your Bitcoins come from like if it's a clean source, there's nothing to worry about if you directly transfer that to an exchange.
But if you know that there's what they call 'tainted' or 'stained' Bitcoins then you shouldn't directly send it to the exchanges.
I have no idea how they do things in process but it's really possible that they're going to flag your account like the ones that comes from casinos.

Use different receiving addresses for different sources of your income.

If anything is wrong with one source, you will only have issue with that income source and one receiving address.
If you use only one receiving address for all income sources, that address will be tainted even you get income from other clean sources.

https://www.bitcoinwhoswho.com/tags
https://insight.is/

More importantly, is this AML score accurate? Take any transactions and check them from several sources and you will find that the number is completely different and very random.

These explorers set such values to appear professional, but all they do is that there are standards that they follow in this classification, and you can easily adhere to these standards and make this number 100%, even if the transaction comes from illegal activities.
The best thing you can do is to use mixing services or withdraw money from one CEX and deposit it to another CEX where it is easy to prove that the deposits came from them.

 + stop using gambling services and casinos.

Sure, there are services that allow you to check any address you request,  literally any address, both of their own and a stranger's one. The latter is especially important if you intend to get bitcoins from someone. Then you can request the address from the sender and first check it.


One of these known services is AMLBot. (https://amlbot.com/)



The first check can be done for free, and then you need to pay a little money,

They'll just ask you some things and you can easily provide that it's from a crypto exchange and just have to explain everything. What's a tougher situation is when the exchange questions you where your source is especially if they tracked and detected that the BTC you sent to them had come from a banned address or from these sources from the image above. That's where the problem will exist and you don't want that to happen.

Did your friend consistently deposit huge amounts in that bank account? That's usually the trigger from these banks if huge amounts you've deposited from crypto exchanges because they suspect that it's from a dirty source when the history of your account isn't like that.

For me, it doesn't really matter much.  If I made my money fair and square, I'm not gonna stress about what mightve happened to it before.  It's the same thing with regular cash too and  when I go to the bank or use the ATM I have no clue if those same dollar bills could've been used for shady stuff at some point.  

I'm not gonna lose sleep thinking about the possible past of my money. I worked hard for my cash, so as long as I earned it honestly through my own labor, thats what matters to me.  Where it came from or where it's been don't concern me.

that is so true, in practical approach, it is not your responsibility to know the past or what have had happened to your money or coins. you will go crazy if you will be hard on yourself checking such history. so long you earned it in legal way, you don't have to worry about such details. with my long history of transacting with crypto or fiat, i haven't done such digging regarding the history of my funds. and i don't think, many people are really doing such tedious task.

I haven't met a CEX that checked beyond the last address used to deposit in your account, so I'd be really surprised with that scenario. In fact, even in the most advanced checks I've encountered, usually for Proof of Asset ownership, they ask only to sign from the depositing address to prove it's yours.

No CEX will backtrack farther than that because:
- they don't have the capacity nor ability
- more importantly, because no AML requirement asks for this.

All these are under the examples of transactions traced to be from exchange account, they are left without choice than to be subjected to the government regulations through the AML agencies, you can pump your transaction fee if you're not using an exchange with the support of a wallet that accepts RBF.


It's a safe practice but who can afford to always do this before making a transaction and whereas if you must make a transaction in which the address is stated on AML, what will you do, avoid your transaction or continue with the risk, this is why privacy is very important, if you think you care about your privacy, then make use of bitcoincore or a mixer.

There is no risk if you use DEX.  There is only risk when using CEX that enforce this weird "coin scoring".

The recent hack and exploit we are seeing are not from CEX. Human programmed websites and contracts always have a risk of exploitation. However sometimes centralized platforms compensate for their losses when Dex won't do that usually because most of the time hackers drain all the funds. The point is to be careful when using any platform that is online. Everything is connected to the internet so anything can happen.

To save up yourself on such hassle then i would definitely do this thing rather than on minding myself on using up some service on trying out to check or verify on where those coins came from which we do know that everything on this space which transactions cant really be that be precisely be known on where its origin whether its tainted coins or not. So if you are really that too mindful about avoiding up yourself with some AML issues then it would be just wise on using up some new coin address and trying out to mix with some methods or ways on which you could possibly do like making some p2p or trying to literally make use of mixers
if you are really that willing to pay some fees or  deductions. So far i havent been able to encounter with those AML checks or whatsoever but rather i've been asked with my local bank on where those
fund transfers or bank transfers came from which it might really be just p2p transactions made out with those crypto conversion and this is where i do worry most rather than on crypto form.

We know that they are really that too sensitive specially with these platforms which are government regulated or abiding such laws and just hope that they wont really be ending up on
checking up your account in regarding those transactions.