The rise of the no KYC exchanger

[Luke BookBear]

I've used Centralized no KYC exchanges for several years now.  I like using them because they're simple, quick and impartial.  No login, no account, no password.  Never used them for deceit or crime.

I know who the devs of some of them are (maybe not personally, but I know of them and their reputations) so I'm not worried about losing my coins but I don't swap huge amounts (God forbid I ever did lose my coins).

I've never swapped for the same coin.

Been using Sideshift.ai since 2019

[FatFork]

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.

True. No-KYC exchanges can provide an option for those seeking more privacy in crypto transactions.  The reality is that  the boundaries between exchanges and mixers are not always clear and  some exchanges offer features like atomic swaps or privacy coins that can obscure the source of funds.  So, while a no-KYC exchange might not be a traditional mixer, it can still provide a degree of privacy.

However, I don't think that's the point here. The admin's decision to ban all crypto mixer advertising came after the government's intensive crackdowns and bans. I guess because of that decision, he doesn't have to deal with it on a case-by-case basis. Whether a similar situation will happen with No-KYC crypto exchanges (or any other services), we just have to wait and see. So far, this is not the case.

[examplens]

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.

As you say yourself, it is about two trades and it has nothing to do with mixing. You can do a similar thing with KYC exchanges, but the process is a bit more complicated.
I want to say that any identification of no-kyc exchanges with mixers is wrong. Although we have seen some more twisted interpretations, so anything is possible.

[alani123]

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.

As you say yourself, it is about two trades and it has nothing to do with mixing. You can do a similar thing with KYC exchanges, but the process is a bit more complicated.
I want to say that any identification of no-kyc exchanges with mixers is wrong. Although we have seen some more twisted interpretations, so anything is possible.

It seems like mental gymnastics to me if we don't see that as a form of mixing.
What's the purpose of mixing coins? Let's go back to the basics.
To remove their trace from your identity and receive the same currency.

Well, doing a double step trade on an exchanger is fulfilling this goal. It's just a couple extra clicks.
So it's a fact that exchangers can be used for mixing.
It's also a fact that part of their transactions must be mixing.
The extent of this is up to question but we'll know how significant the authorities considered the impact of exchangers depending on how long it takes for them to be shut down.

[BlackHatCoiner]

Well, doing a double step trade on an exchanger is fulfilling this goal. It's just a couple extra clicks.

Yes.

So it's a fact that exchangers can be used for mixing

Yep. They're, indirectly, mixers. They are not mixers according to theymos' definition, however, as they do not advertise themselves as mixers. You can call nearly everything a mixer, as "allowing to mix coins" is vague. Coinjoin allows you to mix coins, therefore Wasabi is a mixer, under this definition. What allows you to send coins to Wasabi? Every other wallet out there. So every wallet software can be potentially used to mix coins.

The extent of this is up to question but we'll know how significant the authorities considered the impact of exchangers depending on how long it takes for them to be shut down.

Non-KYC exchanges are often targeted by the feds. (Everything out of the feds' control is often targeted by them.)

[LoyceV]

It seems like mental gymnastics to me if we don't see that as a form of mixing.
What's the purpose of mixing coins? Let's go back to the basics.
To remove their trace from your identity and receive the same currency.

You'll have to go back one more step, to see who you're trying to hide from. KYC exchanges won't make you hide your trace from government, which is the part governments don't like. "Mixing" by itself isn't illegal. So if you're not doing anything illegal, and you like to run your Bitcoins through KYC exchanges, you're free to do so.

[Darker45]

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.

As you say yourself, it is about two trades and it has nothing to do with mixing. You can do a similar thing with KYC exchanges, but the process is a bit more complicated.
I want to say that any identification of no-kyc exchanges with mixers is wrong. Although we have seen some more twisted interpretations, so anything is possible.

Is it beyond the definition of trade if I'm giving you my BTC in exchange for your BTC? Does it have to be ETH or LTC or some other coin for the exchange to fall within the bounds of trade?

What if the exchange is done solely for the sake of erasing the origin of coins? Is the intention enough to consider the transaction merely mixing?

Or what if a non-KYC exchange or a swap platform adds a feature in which a user can choose a similar coin for both send and receive? What does that make of the exchange or swap platform?

[LoyceV]

What if the exchange is done solely for the sake of erasing the origin of coins? Is the intention enough to consider the transaction merely mixing?

From the forum's perspective, I think this doesn't matter. "Mixing" isn't the problem, advertising mixers is what's banned. And theymos only created a definition of a mixer, he didn't define "mixing" itself.

In real life, I wouldn't call it mixing if you exchange money for a parking meter. But if you exchange a suitcase filled with money for another suitcase filled with money, most people will agree that's suspicious.

[ABCbits]

Well, doing a double step trade on an exchanger is fulfilling this goal. It's just a couple extra clicks.
So it's a fact that exchangers can be used for mixing.
It's also a fact that part of their transactions must be mixing.

With very loose/wide definition, you might as well as include all services which let you deposit and later withdraw using different UTXO. That would include all kinds of custodial services.

[dkbit98]

"Mixing" by itself isn't illegal. So if you're not doing anything illegal, and you like to run your Bitcoins through KYC exchanges, you're free to do so.

Isn't illegal YET, but with all the crazy new rule and regulations they can make anything illegal soon.
If they can start arresting people for posting something on twitter and social media than they can do much worse things.
Last I heard is that even accessing twitter in Brazil is now illegal activity...

[LoyceV]

Isn't illegal YET, but with all the crazy new rule and regulations they can make anything illegal soon.

That's going to be difficult to implement, every transaction "mixes" a bit. Unless they come up with the great plan of allowing only one registered Bitcoin address per person, which has huge privacy and security concerns.
Many things are illegal already, and most people just avoid doing them. I don't want to break the law. Not because I necessarily agree with all laws we have, but I don't like the risk involved of doing so.
Let's say mixing is illegal in your country, and you really, really want to mix coins. You can either break the law, or leave the country.

[NotATether]

Let's say mixing is illegal in your country, and you really, really want to mix coins. You can either break the law, or leave the country.

They can't ban mixing without banning Monero.

So you could just buy XMR with BTC --> send it to another exchange --> sell it for BTC.

Since they can't trade Monero then they won't know who was mixing coins or that any mixing had even taken place by design.

And the fact that most exchanges have already de-listed Monero, and you have a situation where the government has no way of telling who is mixing coins unless they go door-to-door.

[LoyceV]

They can't ban mixing without banning Monero.
So you could just buy XMR with BTC --> send it to another exchange --> sell it for BTC.

That's easy to fix: "All citizens are required to report all Bitcoin addresses under their control to government". The result will be no more privacy for law abiding citizens, while criminals don't care.

[BlackHatCoiner]

That's easy to fix: "All citizens are required to report all Bitcoin addresses under their control to government". The result will be no more privacy for law abiding citizens, while criminals don't care.

"If privacy is outlawed, only outlaws will have privacy."-- Philip Zimmermann

When a government passes a law, they need to understand the implications. For every action, there is an equal and opposite reaction. If you're pushing a law, or program, expect something to pop out in the other corner. Outlawing privacy will simply result in more outlaws. And in fact, I'd claim that outlawing privacy will incentivize conscious people to dive deeper into protecting their privacy. (Conscious, because truth-seeking individuals are the greatest threat to the government, and often, need privacy.)

Before strong encryption, people had to place trust on administrators to protect their passwords and private messages. These admins could be threatened to hand over everything to the government. Then, strong encryption became available to the masses, and raised the middle finger. Fast forward to the 21st century, and we have anonymous browsing to the Internet and currencies based on cryptographic proofs.

So, I say, let the bureaus kick the hornet's nest. We can code faster than they can regulate.

[LoyceV]

Then, strong encryption became available to the masses, and raised the middle finger. Fast forward to the 21st century, and we have anonymous browsing to the Internet and currencies based on cryptographic proofs.

All true. But: how many people use it? I have to deal with schools, and instead of using PGP to send messages, they use a "secure" third party with a "2FA" code send to the same email address. They don't care that said third party can access everything, because the third party told them it's secure when they sold it to them.
This, unfortunately, sums up how almost all privacy matters are dealt with in reality.
I can't help but think government loves this approach. Instead of using actual P2P communication with client-side encryption/decryption, the encryption only happens on the front end.

[NotATether]

All true. But: how many people use it? I have to deal with schools, and instead of using PGP to send messages, they use a "secure" third party with a "2FA" code send to the same email address. They don't care that said third party can access everything, because the third party told them it's secure when they sold it to them.

That set-up makes no sense to me technically. But who am I to judge. Schools are using all sorts of wacky old-school (pun not intended) software that I've never heard of.

I guess the "secure third party with a 2FA code" is just another website where you can read the actual message after you log in or something?

But I've never heard of this sort of approach being used anywhere until now.

[BlackHatCoiner]

All true. But: how many people use it? I have to deal with schools, and instead of using PGP to send messages, they use a "secure" third party with a "2FA" code send to the same email address.

You don't have lots to do in that particular case, apart from resorting to laws like GDPR in case the third party sells you out. If the message you want to transmit is very sensitive, better go and talk face-to-face with the teacher.

This, unfortunately, sums up how almost all privacy matters are dealt with in reality.

If one of the two parties which exchange messages does not care about their privacy, then there won't be any guaranteed privacy, whether we have strong encryption software or not. It all comes down to how much you value this virtue.

The only exception to this rule is when the merchant does not care about their privacy, but accepts payment in private cryptocurrencies.

[LoyceV]

That set-up makes no sense to me technically.

Same here. It's not only schools, doctors do the same. To me, it seems like they try to cover their asses saying they did everything they could for privacy. Just yesterday, I had someone "explain" to me it's really secure (<shows front-end website>), because you need to login to get to the data....

I guess the "secure third party with a 2FA code" is just another website where you can read the actual message after you log in or something?

Yep.

But I've never heard of this sort of approach being used anywhere until now.

I guess it's a country thing: here, the privacy laws are quite strict, but broken by many companies (and even the tax agency). They just created an impossible law that only large corporations have the budget to comply to.

If the message you want to transmit is very sensitive, better go and talk face-to-face with the teacher.

That's not really the point: nobody has to know my messages are not sensitive

The only exception to this rule is when the merchant does not care about their privacy, but accepts payment in private cryptocurrencies.

If the merchant knows your shipping address, that doesn't really help.

[BlackHatCoiner]

That's not really the point: nobody has to know my messages are not sensitive

In that case, neither the PGP solution satisfies your need, because PGP signals that the message is sensitive.

If the merchant knows your shipping address, that doesn't really help.

It does help greatly. What you want to hide is the transaction in this case, not who you are. Think of this: what would you feel more comfortable doing? Showing to the merchant that you have 1 BTC in change, or just showing them no change?

[NotATether]

If the merchant knows your shipping address, that doesn't really help.

It does help greatly. What you want to hide is the transaction in this case, not who you are. Think of this: what would you feel more comfortable doing? Showing to the merchant that you have 1 BTC in change, or just showing them no change?

I don't think anybody should have outputs that are as large as 1 BTC, if they are going to bounce it around to different merchants. It could cause some trouble if the payment or deposit is rejected for some reason and then they ask for a source of funds for those large inputs that are included in the transaction.

I'd think that 0.1BTC is the largest you should try sending around, but of course the next price cycle will make that much lower.