Sending coins to an exchange vs mixers?

[btcduster]

It's me again, with a strange question.
I keep reading and I'm trying to figure something out.
If I send coins to an exchange and start trading there, as soon as I withdraw the coins they go through another address with a different amount of what I initially entered, I can also withdraw different amounts several times. Isn't this the same as passing coins through a mixer?
I read that some exchanges do not require KYC below a certain amount.

[1714171913]

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[1714171913]

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[aesma]

Yes let's talk about an exchange without KYC, else there is no point.

No KYC doesn't mean not keeping some data on you, that authorities (or hackers) could access. And the exchange knows your incoming and outgoing addresses, so they have a "chain" going back to you.

Depending on what you're doing it might be enough obfuscation, usually KYC is required when you want bigger amounts, so if you stay below that amount, you probably won't be bothered by anyone.

Coinmixers are still a level above, because they exist only to provide this service.

[Charles-Tim]

https://bitcointalk.org/index.php?topic=5267680.msg54966450#msg54966450

It depends on which mixer you are using.

Many mixers do simply move your coins around a few addresses, combine them and split them from some other deposits, and then send you coins back again. There was some interesting research posted on this forum which Lucius has linked to above which showed that such mixing methods could be broken and outputs linked to inputs without too much trouble.

ChipMixer uses a different method of pre-funding addresses with set amounts of bitcoin, and then handing over the private key to those addresses after you have made a deposit, which you can then import in to your own wallet. From a blockchain analysis point of view, these mixed coins were generated before you even made a deposit, and you can also merge or split them to obfuscate the amounts involved, leading to much greater privacy.

I hope this is helpful. Mixers are different from how exchanges work. Exchanges can even freeze you funds and most give you no privacy. Like Hitbtc exchange, you can trade with certain amount of funds with no kyc but some accounts can be freezed.

[o_e_l_e_o]

If I send coins to an exchange and start trading there, as soon as I withdraw the coins they go through another address with a different amount of what I initially entered, I can also withdraw different amounts several times.

This is correct. Centralized exchanges give each customer one or more deposit addresses. Once coins have been deposited to those addresses, they are all swept and combined in to a single central hot wallet. Withdrawals are then processed from this central hot wallet. This means that even if you just deposit and then withdraw without doing any trading, you will get back different bitcoin from a different address.

Isn't this the same as passing coins through a mixer?

Not at all. All centralized exchanges keep meticulous logs of all the transactions they receive and they send. Even without KYC, they keep plenty of details about you, such as your email addresses, IP addresses, browser fingerprint, computer software, and so on. Many monitor all deposits they receive to see where the coins are coming from, and they monitor the coins after they have been withdrawn. They all have the ability to shutdown your account, seize your coins, or spring KYC on you, if they don't like what you are doing. They will be quite willing to hand all your data over to any government or three letter agency which comes knocking, not to mention how often exchanges are hacked and could therefore leak all this data online. Most exchanges will pick up on the fact that you are using them as a surrogate mixer, and will shutdown your account for that.

Using a centralized exchange risks both your coins and your privacy.

[yazher]

That's how it works for certain coins because obviously, it has a different address than BTC. that if you want it to convert to BTC, not the other coins as well. As for me, After I successfully sold my altcoins to BTC, I convert it to XRP for fast transactions, and Yes! that would also be another way to hide your main BTC address. So far so good when I do this method until now. By the way, the exchange I'm withdrawing my XRP has supported XRP, ETH, and BCH. that would give me a lot of options to choose which transaction fees have less and I choose XRP. it has fast and lowest transaction fees.

[btcduster]

Wow, thanks a lot for the clarification, especially to o_e_l_e_o, I see you're wearing a mixer ad, do you work there? You seem to have a lot of knowledge about these things.
I try to read the information that is available on the Internet but it is quite contradictory.
That's why I prefer to ask here.
This forum turns out to be a great place.

[o_e_l_e_o]

Wow, thanks a lot for the clarification, especially to o_e_l_e_o, I see you're wearing a mixer ad, do you work there? You seem to have a lot of knowledge about these things.

I wouldn't say I work there, but I do receive bitcoin payment from ChipMixer for wearing their ad in my signature. I am generally pretty passionate when it comes to all things privacy, and I am definitely one of the more hardcore members of the forum when it comes to general privacy practices. I have never used a centralized exchange, I have never completed KYC anywhere related to bitcoin or cryptocurrency, and I trade exclusively peer-to-peer. I have no apprehensions recommending ChipMixer if you are looking for a reliable mixer, as they have proved time and again they are trustworthy, mixing thousands of bitcoin worth millions of dollars simultaneously without scamming a single customer. If you prefer to avoid mixers, then using coinjoin transactions would be your best bet. Simply put, these are where multiple inputs from different people and outputs to different people are all combined in the same transaction, so it isn't clear which input is linked to which output. Wasabi wallet is probably the easiest way to achieve this currently.

But as you say, you will get a lot of conflicting information, and it is good practice not to trust the information from a single source (me included). Leave this thread open for a while and get some more answers. You can also use the search function to look for older threads which have discussed similar things. For example: Why not use Exchange instead of Mixer?

[btcduster]

Thank you for the detailed information. I would say that they made a very good choice by hiring you. If I have to use a mixer, I would definitely check yours.
I tried to search, but it kept coming out this "90 seconds waiting" error message. Will have to get oriented a bit more, but this HELP menu is almost useless.

[bob123]

It would be better if you withdraw BTC trough the chain of exchanges  say your-wallet-#1 --> exchange 1: sellBTC -- buy alt1 --> exchainge2: sell alt1 --buy alt2 -->  exch3: sell alt2 - buy BTC --> your-wallet-#3

Or instead of using random altcoins, you actually use only a single one which breaks the link: Monero.
Convert to monero, transfer, sell monero and you are fine.

However, as outlined previously, using an exchange to gain privacy is a bad idea due to several factors.

There are basically 3 good options to remain privacy when using cryptocurrencies:

• Using a mixer
• Participating in coinjoin's
• Using a privacy-focused cryptocurrency a.k.a. monero

But in the end it all depends on the thread model. What is the reason for remaining somewhat anonymous and/or gaining privacy.
If you just want to hide your spendings from the person your received the coins from (e.g. just a random person), using an exchange is fine. If you want to hide it from your government, an exchange is definitely not an option

[stompix]

It would be better if you withdraw BTC trough the chain of exchanges  say your-wallet-#1 --> exchange 1: sellBTC -- buy alt1 --> exchainge2: sell alt1 --buy alt2 -->  exch3: sell alt2 - buy BTC --> your-wallet-#3

Or instead of using random altcoins, you actually use only a single one which breaks the link: Monero.
However, as outlined previously, using an exchange to gain privacy is a bad idea due to several factors.

Using exchanges when intentionally trying to hide your traces might get you in far more trouble than you anticipated, the thing is that for the steps the user thought in his plan he needs at least 3 exchanges, and all of them should be trustable, require no KYC and have no record of selectively scamming , oh, locking your funds for "security" reasons. It does indeed come down to what you want to hide, but I wouldn't take the risk of trying to wash my coins though exchanges, nobody has a clue how much of the information they share between them or with the authorities, and you might end with in a more difficult situation you would have simply cashing out some BTC you won on a gambling site. You have a few hundred $, nobody really cares about and you will end up paying 1/4, 1/3 of them in all those fees for nothing, you have a few hundred thousand dollars you most likely risk having them all seized.

If you really want to go all out and don't care how much you spend and want to cut all traces you could probably add a another solution, a trip to a few ATMs and cash in and out, all while paying 10$ to someone to stand in front of the machine and get his picture taken. And this is real, I know somebody who does this
But this is pretty much close to the border of paranoia, although not sure on which side of it.

[Kupid002]

It's me again, with a strange question.
I keep reading and I'm trying to figure something out.
If I send coins to an exchange and start trading there, as soon as I withdraw the coins they go through another address with a different amount of what I initially entered, I can also withdraw different amounts several times. Isn't this the same as passing coins through a mixer?
I read that some exchanges do not require KYC below a certain amount.

yes it's almost the same since the balance will came from other address not belong to the one you send. But if the balance you send is came from illegal activity then the exchange have the right to block your account or Will ask for you to make KYC ,If its big amount then its mandatory KYC. thats why its not a wise idea to use exchange as alternative mixer.

[bob123]

Not only Monero is capable to break the link, Veil makes it no worse, but nothing can be compared with BlackBytes of Obytes.

A lot of shitcoins claim to be anonymous and/or private. And most of them have severe vulnerabilities leaking information which heavily decrease the anonymity set and/or completely negate the privacy aspect.
If you want to be sure that your altcoin is privacy-preserving, the most rational choice is monero, nothing else.

BTW, such complicated exchange chain may be ( in some respect) even better than mixers because the coins you receive will never be tainted.

The concept of "tainted coins" is flawed. Coins do not exist, there are only UTXO.
You can estimate the probability whether the output and the input still belong to a person. But you can not "taint" a coin as you would with a dollar bill.
"Tainted" coins can not be used to track people and/or to deem specific UTXO's as bad. At least not after the previously targeted UTXO has been spent.

[bob123]

I would advice you to learn more about Veil and BlackBytes and almost sure you will change your mind after  doing that.

There is literally not a single reason to do so.
I am not interested in wasting my time with shitcoins.

Yeah, that is a kind of truism, but people used to use "coin" when speaking of Bitcoin. (Pay attention to the red bold part in the name). And I’m sure if you ask the Bitcoin owners how many UTXOs they have  99% of them  will think you are a stalker.

How people speak about bitcoin is not relevant to how one can be tracked using bitcoin.
Actually, i don't get why you are distracting now. I wasn't pointing out that it should be "tainted UTXO" instead of "tainted coins". I was saying that the concept itself is flawed. The terminology used by people talking about BTC is irrelevant in this context.

Now let's stay on-topic please.

[aesma]

It's me again, with a strange question.
I keep reading and I'm trying to figure something out.
If I send coins to an exchange and start trading there, as soon as I withdraw the coins they go through another address with a different amount of what I initially entered, I can also withdraw different amounts several times. Isn't this the same as passing coins through a mixer?
I read that some exchanges do not require KYC below a certain amount.

It would be better if you withdraw BTC trough the chain of exchanges  say your-wallet-#1 --> exchange 1: sellBTC -- buy alt1 --> exchainge2: sell alt1 --buy alt2 -->  exch3: sell alt2 - buy BTC --> your-wallet-#3 But that involves quite a loss due  to both trade and transactions fees so t’s worth doing if there’s something to hide and your fund-itself >> than all-losing-involved.

That seems like a lot of trouble, without any guarantees. If someone is really on your trail, that chain can be traced back, even if that will involve several countries etc., so will probably only happen if you're suspected of criminal activity. Today anyway. The problem is that in the future, all these exchanges may have to release everything to every authority, and with the help of blockchain analysis software etc., authorities will be able to know you own some BTC, which might be worth a lot by that time.

[nakamura12]

It's me again, with a strange question.
I keep reading and I'm trying to figure something out.
If I send coins to an exchange and start trading there, as soon as I withdraw the coins they go through another address with a different amount of what I initially entered, I can also withdraw different amounts several times. Isn't this the same as passing coins through a mixer?
I read that some exchanges do not require KYC below a certain amount.

It would be better if you withdraw BTC trough the chain of exchanges  say your-wallet-#1 --> exchange 1: sellBTC -- buy alt1 --> exchainge2: sell alt1 --buy alt2 -->  exch3: sell alt2 - buy BTC --> your-wallet-#3 But that involves quite a loss due  to both trade and transactions fees so t’s worth doing if there’s something to hide and your fund-itself >> than all-losing-involved.

That seems like a lot of trouble, without any guarantees. If someone is really on your trail, that chain can be traced back, even if that will involve several countries etc., so will probably only happen if you're suspected of criminal activity. Today anyway. The problem is that in the future, all these exchanges may have to release everything to every authority, and with the help of blockchain analysis software etc., authorities will be able to know you own some BTC, which might be worth a lot by that time.

Yes it's a lot trouble buying and selling altcoins just to hide your main btc address. I have tried an exchange where I deposited to an address but when I withdraw it's from another wallet. Splitting your transaction in two would also work compared to single transaction which can be trace.

[SquirrelJulietGarden]

You have to read ToS or FAQ to see the exchanges you use have restrictions on mixers or not. If they emphasize about potential restrictions from suspicious deposits especially from mixing or Coin Join, you know that your deposits can be at risks and under their radars as well as probably unable to withdraw after deposits.

Some exchanges or casinos suspect you use their services to mix your coins so that they will return your deposits back to you but some won't.

[Krislaw]

It's possible to do that. The wallet address exchanges give you are their only. Once you send coins to them, it automatically sends it out to their main.You will still have figures appearing in your wallet balance, but anytime you request for withdrawal, the coin are always sent from their main wallet.
Have it in mind that most exchanges requires KYC to operate on them.

[btcduster]

I got some very good informative answers, but some guys keep posting the same thing.
Didn't you read the previous comments before replying?
I'm locking this one.
Thank you for your efforts, though.