The rise of the no KYC exchanger

[alani123]

I don't quite understand what mod would consider it makes sense why when I talk about how certain services get banned in Bitcointalk it is related to the services discussion board   Like really the thread had to be moved there from the Meta board? Whatever I guess but it doesn't make much sense.

[LoyceV]

Like really the thread had to be moved there from the Meta board?

That's a question to ask on the Meta board

[hugeblack]

These services are trying to gain popularity with the word NOKYC but what happens is that if your coins are high risk most of them offer a refund instead of completing the transaction so I think we have moved from a stage where centralized platforms offered the possibility of withdrawing up to 100 BTC per day without KYC to a stage where you can get a refund without sending your documents.

As for the reason they do this, they want to make profits but they use crypto APIs.

In short, these services still do not violate financial regulations and are trying to find a middle ground.

[LoyceV]

These services are trying to gain popularity with the word NOKYC but what happens is that if your coins are high risk most of them offer a refund
~
In short, these services still do not violate financial regulations and are trying to find a middle ground.

Depending on the country, this may or may not be true. There's one thing many of them have in common though: the owners are anonymous. Asking for KYC while you have no idea who you're sending it to a very bad. For all I know, they could use it for identity theft.

[shield132]

Very shortly after bitcointalk banned advertising, promotional threads and linking to mixers, there appeared a plethora of no-KYC exchangers advertising at the same or similar rates of payment towards their members.

If there's so much demand for no-kyc exchanges then why don't we see any decentralized finance platform advertising here? Instead we only see some wholly centralized closed source sites doing so. In the meantime anyone could go to 1inch.io or openocean.finance and access in USD billions worth of liquidity across dozens of different blockchains with varying degrees of trustlessness and none of them requiring KYC to access all of their liquidity.

There is a demand but every company has a different approach and everyone promotes where they think they get the best cost-per-result ratio. Btw years ago, a very famous exchange Kucoin was running a signature campaign on bitcointalk.

Centralized no KYC exchanges have 0 competitive advantage to decentralized platforms. In a way, we're already close to Satoshi's vision in that regard thanks to the solutions that are available, and yet here on bitcointalk advertising is dominated by centralized platforms. Kinda ironic. The only advantage I see to centralized no-KYC exchanges is that you're able to deposit BTC on-chain and withdraw on the same chain simply with the funds coming from another address. If the goal was to exchange funds from one crypto to another then there would be absolutely no reason to use a centralized clearing house. But that's clearly not it.

While I personally have nothing against this type of promotion, it's quite obvious that this is a simple re-branding of the centralized mixer advertising campaigns. So it's not a question of if, but when will the feds start going after these types of websites too. Arresting their founders, seizing all user funds, pursuing aggressive extradition procedures, giving the administrators extremely long sentences by throwing the book towards them in court etc.  

That's not true, they have an advantage. I need to quickly exchange my Bitcoins into Dash, I'm too lazy to register on DEX or let's say I don't know what DEX is and I'm looking for an instant exchange, at the same time I want to get rid of KYC because I feel uncomfortable by doing this procedure. What I do next? I start looking for non-kyc instant exchanges.

Non-kyc instant exchanges aren't the alternatives of mixers. Yes, mixers got banned and non-kyc exchanges started promotion more actively but that only means that some people saw the opportunity of a new business after the ban of mixers. I wouldn't call it a rebranding or reshaping of mixers.

[Lucius]

I don't quite understand what mod would consider it makes sense why when I talk about how certain services get banned in Bitcointalk it is related to the services discussion board   Like really the thread had to be moved there from the Meta board? Whatever I guess but it doesn't make much sense.

I'll just say that I'm not the one who caused the topic to end up in this board - but as @LoyceV says, it's now a question for the Meta board. You can move the topic to Meta yourself, but such things have not ended well in the past.

[DaveF]

They will (probably) eventually be shutdown if not by the governments then the services they are using.
As has been pointed out instead of having people (users) complete KYC these regulated exchanges are letting other businesses take the responsibility of doing it.
This will only last till Binance (or some other exchange) gets hit with some form of lawsuit / fine and it all starts all over again.

There are other no KYC like https://exch.cx/ but places like that are less common then say simpleswap.io or godex.io/

-Dave

[alani123]

I'll just say that I'm not the one who caused the topic to end up in this board - but as @LoyceV says, it's now a question for the Meta board. You can move the topic to Meta yourself, but such things have not ended well in the past.

Frankly I don't mind that much about it to start another thread or move this one again. Mods gonna mod.

Non-kyc instant exchanges aren't the alternatives of mixers. Yes, mixers got banned and non-kyc exchanges started promotion more actively but that only means that some people saw the opportunity of a new business after the ban of mixers. I wouldn't call it a rebranding or reshaping of mixers.

A non-KYC exchanger that uses third party exchanges to process transactions could very well be a good alternative to a mixer.
If executed well, it can be very hard to detect the transaction has gone through the exchanger service. Now for instance binance.com allows users to create new deposit addresses for each deposit, and I assume this can also be done via API. So not only is Binance supporting these services, it's even enabling them. So long as big exchanges tolerate such services they're gonna function.

But the reason they might be better than even traditional mixers, is that not only do you put in funds from one address and can receive from a different one, as a mixer is supposed to do. But also your funds can appear to be coming from a "clean" service like Binance for instance. So much money goes through Binance that it's now impossible to block all of it as "tainted" because millions of businesses and individuals depend on it for their daily transactions. Whereas a traditional mixer is easy to detect when used. So while funds come from another address, those inspecting the blockchain could easily tell you used a mixer.

Probably a few developers got wind of the fact that for everyday transactions most users don't need very advanced mixing like coinjoin and could just do with the funds coming out of an exchange. In the end of the day, fees of 0.25% to 1% that most exchangers have are much lower than what mixers used to charge too, so it's a win-win.

[LoyceV]

A non-KYC exchanger that uses third party exchanges to process transactions could very well be a good alternative to a mixer.
If executed well, it can be very hard to detect the transaction has gone through the exchanger service. Now for instance binance.com allows users to create new deposit addresses for each deposit, and I assume this can also be done via API. So not only is Binance supporting these services, it's even enabling them. So long as big exchanges tolerate such services they're gonna function.

You're still going with the mixer narrative, but you're wrong. Binance keeps track of every transaction anyone ever made, and so do most other exchanges. They're a lot like banks when it comes to keeping transaction records. The same goes for casinos.
If you're trying to hide your payment from your wife, then depositing and withdrawing to an exchange works very well. If you're trying to hide it from a government, they'll probably find it if they start looking. And if they automate everything and check everything, they'll find everything. Now that I think about it: I'd be surprised if chain analysis companies don't have access to this data already.

[Lucius]

I'll just say that I'm not the one who caused the topic to end up in this board - but as @LoyceV says, it's now a question for the Meta board. You can move the topic to Meta yourself, but such things have not ended well in the past.

Frankly I don't mind that much about it to start another thread or move this one again. Mods gonna mod.

Mods generally don't do anything by themselves, but someone made a report that one of the mods agreed with - which means that the topic was moved here with the action of at least two forum members.

~snip~
Now that I think about it: I'd be surprised if chain analysis companies don't have access to this data already.

I would bet that in addition to all those billions, CZ also gave a lot more to the US government, and that's why he only got 4 months in prison (if it can even be called that) considering the type of prison in which he is serving his sentence.


Source

[ABCbits]

Non-kyc instant exchanges aren't the alternatives of mixers. Yes, mixers got banned and non-kyc exchanges started promotion more actively but that only means that some people saw the opportunity of a new business after the ban of mixers. I wouldn't call it a rebranding or reshaping of mixers.

A non-KYC exchanger that uses third party exchanges to process transactions could very well be a good alternative to a mixer.
If executed well, it can be very hard to detect the transaction has gone through the exchanger service. Now for instance binance.com allows users to create new deposit addresses for each deposit, and I assume this can also be done via API. So not only is Binance supporting these services, it's even enabling them. So long as big exchanges tolerate such services they're gonna function.

If you search "binance risk control" on Google, you will see some rant that their account got suspended either after deposit or withdraw request. I expect many centralized exchange have similar practice. So your idea wouldn't work, since i expect account belong to non-KYC exchange would get suspended few times before it's suspended permanently.

But the reason they might be better than even traditional mixers, is that not only do you put in funds from one address and can receive from a different one, as a mixer is supposed to do. But also your funds can appear to be coming from a "clean" service like Binance for instance. So much money goes through Binance that it's now impossible to block all of it as "tainted" because millions of businesses and individuals depend on it for their daily transactions. Whereas a traditional mixer is easy to detect when used. So while funds come from another address, those inspecting the blockchain could easily tell you used a mixer.

FWIW, some mixer these days claim they provide "clean" coin or coin which doesn't trigger exchange risk control.

[dkbit98]

If you are using something than you are supporting it.
Everyone who is constantly using and promoting KYC exchanges is effectively shooting themselves in the foot, while thinking they will be ''safer'' in future.
There are plenty of good non-kyc options available but I won't force anyone to use them.
  

Now that I think about it: I'd be surprised if chain analysis companies don't have access to this data already.

They have this data 100% since all this chain analysis companies are in fact government agencies, especially after they arrest exchange owners and put them in jail like they did with CZ.
Maybe before there was mandatory KYC on exchanges some things could remain hidden, but with KYC all personal information is now permanently connected with bitcoin address history.

[libert19]

Are you aware that a lot of DeFi services ask you to do KYC in order to access a number of features?

It is another thing for consideration. Hilarious that DeFi services ask KYC but it makes sense because their founders can be requested by governments. DeFi platforms with well-known founders, big risk that KYC might come anytime.

I have used plenty defi dapps, and not for once have been asked for kyc. It'd be better if you were to list names of dapps you used.

Thing with defi is, smart contracts are public, even if frontend were to compromised, or it were to be taken down, you can interact with smart contacts directly and withdraw your funds. I have done this twice myself.

[LoyceV]

Everyone who is constantly using and promoting KYC exchanges is effectively shooting themselves in the foot, while thinking they will be ''safer'' in future.

On the Bitcoin-side, I agree. But on the fiat-side, where banks are involved, transactions with registered exchanges raise less questions than transactions with complete strangers anywhere in the world.

The alternative would be cash, which also raises questions for large purchases. And involves other risks.
I don't like it, but as long as Bitcoin isn't accepted when I buy a car, I have to go through banks and other centralized exchanges.

[alani123]

A non-KYC exchanger that uses third party exchanges to process transactions could very well be a good alternative to a mixer.
If executed well, it can be very hard to detect the transaction has gone through the exchanger service. Now for instance binance.com allows users to create new deposit addresses for each deposit, and I assume this can also be done via API. So not only is Binance supporting these services, it's even enabling them. So long as big exchanges tolerate such services they're gonna function.

You're still going with the mixer narrative, but you're wrong. Binance keeps track of every transaction anyone ever made, and so do most other exchanges. They're a lot like banks when it comes to keeping transaction records. The same goes for casinos.
If you're trying to hide your payment from your wife, then depositing and withdrawing to an exchange works very well. If you're trying to hide it from a government, they'll probably find it if they start looking. And if they automate everything and check everything, they'll find everything. Now that I think about it: I'd be surprised if chain analysis companies don't have access to this data already.

The thing here is, so long as your name is not attached to a transaction, it's hard to track.
BTC mixers also operated much like centralized clearing houses. It was obvious to third parties seeing the transactions to associate your coins with the mixer. So in a way, these coins were even more "tainted" than having to pass through an exchange.

If you use an exchanger to pass your coins through an exchanger, the pot they get mixed in is actually even bigger and much if not the majority of this money is from "clean" transactions so it's hard to be labeled as "tainted".

And to clarify, given that exchangers don't collect any user's identifying information, with some even operating via TOR, nobody cares if the underlying infrastructure utilizes Binance. With the right use of APIs and fresh addresses the exchanger can make it seem like the coins came straight through the exchange, but because of the exchanger the only name attached to these transactions will be the KYC'd account of the business owner. So if the authorities crack down on such service, they'd see hundreds of thousands of transactions with the name of one party, going to hundreds of thousands of different addresses. By all accounts, this acts like a mixer because it negates KYC/AML measures and makes transactions much harder to track from point of entry to point of exit from the exchanger.

Think about it, not it's not just BTC inputs and BTC outputs. It's coin x to coin y and potentially even from chan z to chain u... So going through any metadata to decipher the flow of funds become even more complicated unless they seize the data of the exchanger. Depending on implementation also, some exchanger transactions might also be completed without any transactions on the exchange, by utilizing own balances. Of course this is a matter of trust and an exchanger utilizing nothing else than the API of a centralized exchange would be easier to track. And given how opaque these services are it's hard to know what each one is doing.

I wanted to add with an edit of something I stumbled upon just after I clicked away from this thread: through this mixer review you will see that most of today's functioning BTC mixers will themselves shove out exchange coins which are considered "clean" among the crown that feels the need to use mixers. So the no-KYC exchanger is a very likely replacement for a mixing, especially given if mixers do the exact same.

[joker_josue]

I wanted to add with an edit of something I stumbled upon just after I clicked away from this thread: through this mixer review you will see that most of today's functioning BTC mixers will themselves shove out exchange coins which are considered "clean" among the crown that feels the need to use mixers. So the no-KYC exchanger is a very likely replacement for a mixing, especially given if mixers do the exact same.

Well, I think it's a little different from an exchange mixer.

In a mixer, transactions are shuffled between thousands of movements, making it difficult to track the path of the coins, leaving it unclear who owns each coin.

On an exchange, the movement is already linear, even when exchanging crypto. For example, if someone uses an exchange without KYC to exchange BTC for ETH, it will be possible to continue to "follow" the user, since it is known that userX entered with BTC and left with ETH. Unlike an exchange with KYC, someone knows that userX is King Charles. On an exchange without KYC, we still don't know who userX is.

[ABCbits]

--snip--
I wanted to add with an edit of something I stumbled upon just after I clicked away from this thread: through this mixer review you will see that most of today's functioning BTC mixers will themselves shove out exchange coins which are considered "clean" among the crown that feels the need to use mixers. So the no-KYC exchanger is a very likely replacement for a mixing, especially given if mixers do the exact same.

FWIW, coin from different kind of exchange is treated differently. Here's a snipped example from AMLBot (i don't endorse this website),

Danger

• Fraudulent Exchange

Suspicious sources

• Exchange | High Risk
• P2P Exchange | High Risk

Trusted sources

• Exchange
• P2P Exchange

So your theory doesn't sound plausible for me.

[examplens]

I wanted to add with an edit of something I stumbled upon just after I clicked away from this thread: through this mixer review you will see that most of today's functioning BTC mixers will themselves shove out exchange coins which are considered "clean" among the crown that feels the need to use mixers. So the no-KYC exchanger is a very likely replacement for a mixing, especially given if mixers do the exact same.

Recently, a definition appeared, if the exchanger does not have a swap option where the user will send BTC and receive BTC in return, it cannot be considered a mixer. Everything else is an exchange from one currency to another.

Very shortly after bitcointalk banned advertising, promotional threads and linking to mixers, there appeared a plethora of no-KYC exchangers advertising at the same or similar rates of payment towards their members.

I don't see similarities in pay rates if you are referring to sig campaigns and not something else - mixers used to pay over $200 a week for Hero/Legendary, and today the maximum any member can get is $120 a week.

We need to stop measuring projects by their signature rates on the forum as soon as possible. This is just one of the marketing channels, I guess because it is easy to determine how much money someone spent on the campaign, a good part of the forum members look at the project only through the signature campaign.

[alani123]

I wanted to add with an edit of something I stumbled upon just after I clicked away from this thread: through this mixer review you will see that most of today's functioning BTC mixers will themselves shove out exchange coins which are considered "clean" among the crown that feels the need to use mixers. So the no-KYC exchanger is a very likely replacement for a mixing, especially given if mixers do the exact same.

Recently, a definition appeared, if the exchanger does not have a swap option where the user will send BTC and receive BTC in return, it cannot be considered a mixer. Everything else is an exchange from one currency to another.

I don't mind this definition but this is just a measure Bitcointalk took and it's not an effective KYC/AML measure.
If I go on an exchanger and start two trades, one entering BTC<->XYZ and the second as XYZ<->BTC then I complete a BTC to BTC passthrough effectively without falling under the category of "mixer" based on the above definition.

[FinneysTrueVision]

I don't mind this definition but this is just a measure Bitcointalk took and it's not an effective KYC/AML measure.
If I go on an exchanger and start two trades, one entering BTC<->XYZ and the second as XYZ<->BTC then I complete a BTC to BTC passthrough effectively without falling under the category of "mixer" based on the above definition.

There are many centralized services that can be used to obfuscate the origins of your funds. You can deposit BTC in a casino and you will receive a completely unrelated UTXO when you make a withdrawal. Just because something can be abused a certain way does not make them a mixer. Most instant exchanges do actually have some sort of AML or KYC policy that discourage illicit use.

Some exchanges don’t discriminate users based on transaction history and will accept coins from anybody, including criminals, this does not change the fact that the primary usage of instant exchanges is overwhelmingly legitimate. As long as there are people willing to use altcoins for speculating, spending, staking, earning yield on other chains, or farming airdrops these exchanges will continue to exist and provide a useful service.