In what cases does Binance asks for source of funds ?

[TryNinja]

Not Binance, but BitGet has asked me to explain a mere transaction of $1000 just because -- it was a P2P transaction with another member, so nothing too suspicious. I had to write a small explanating and give them forum links about the deal.

Then when using their (BRL) fiat on-ramp/off-ramp, I had to send my tax fillings from the last year to prove that I had enough money to move what I was moving (?).

[Z-tight]

It's not always the case, sending tainted coins from gambling or mixers will always get you to trouble, i'm talking to reputed exchanges with lots of users and volume. Talking about the "guess" of blockchain analysis as an excuse from new and unreputed exchanges will have a higher chance compared to reputed ones.

How do you determine which utxo is tainted, take note that there is nothing such as tainted BTC, and that term is simply used by custodial services to confiscate people's funds and attack BTC's fungibility. Anyone can use a gambling site or a privacy solution, and it does not mean they are involved in anything illicit.

My point here is that, it is better to understand that any exchange, it does not matter which it is, can confiscate funds deposited into it, for any reason at all.

[PX-Z]

How do you determine which utxo is tainted, take note that there is nothing such as tainted BTC,

Ask any chain analysis, it's just the same idea of dirty money/cash as we're talking about money where is nothing such "dirty cash" as all.

Anyone can use a gambling site or a privacy solution, and it does not mean they are involved in anything illicit.

Of course, but whatever you say the point is funds from these platforms are considered as high risks and higher chance of getting confiscated in any CEX, not just for any reason but for this exact reason especially funds from privacy solutions. While unreputed and new exchanges probably will confiscate your funds almost for any reason, scam accusations board is the witnessed.