So I have a friend....
Has just bought more btc from an exchange with KYC.
The funds/purchase all legitimate, but concerned about future privacy.
If transfer directly to a wallet, then it is easy (for gov't) to find who owns that wallet.
Can transfer through a few wallets, which just makes a trail and adds a few minutes to research time.
Yes, could claim that it was a payment and deny ownership or theft if needed in the future, but much prefer a way so any questions do not even arise.
But what are other options?
-Use a mixer?
-Transfer to another exchange without KYC and sell for Monero etc. then buy btc back?
What other ways to increase privacy for exchange-bought btc?
Doing both of what you said is the easiest & best ways to do it (and arguably the only ones).
Monero is completely anonymous but converting back to BTC after buying XMR may compromise his identity again so you'd have to use it to make a purchase directly, or use a non-KYC exchange such as Cryptopia.
Otherwise, a Bitcoin mixer would be sufficient, I'd recommend this one:
https://chipmixer.com/