How to improve privacy before paying someone in a safe way?

[Satofan44]

The part in bold is not true. There are some free tools and there are many paid tools with which you can check if the coins are "tainted". Putting aside our ideological disagreement with the tainted bullshit, these tools will give you exactly what an receiving institution or exchange is going to see when they receive said coin.

How do you know that an exchange uses those tools? Maybe they do, maybe they don't and have some other tools.

Tools that are industry standard rely on the same data sources, they don't have to use the same exact tool to see the exact same information -- If this was not the case, there would be complete chaos and it would be near impossible to use multiple reputable exchanges at the same time in any sane way. Furthermore, experimental evidence will confirm it but you have to do it yourself. I have tried with countless transactions using clean coins, and sometimes with tainted coins to see what would happen down the road with one of these systems. If you don't believe in the theory/research, then you can do the tests yourself with some tools assuming that you have money that you could burn as an expense to verify it for yourself.

Not sure what you mean by "wallet accounts". Im mostly familiar with Bitcoin Core and Electrum.

Coin Control without accounts is for noobs, and mostly old timers that have outdated methods and knowledge tend to suggest people things like that. A single seed can derive countless addresses in countless accounts, so you would have something like this:
seed - coin - account 0
seed - coin - account 1

By using them this way, you can ensure that there is no leaking between your accounts. For example, account 0 can be your bigger hot-wallet stash. Account 1 can be restaurant payments. If you use accounts correctly no error that you commit within a single account will leak anything about the rest of what you have going on in the same wallet. Whereas with traditional single-account coin control, all you need is a single basic mistake to undo a lot of work and reveal a big portion of your history. Accounts are pretty easy to do in Sparrow: https://www.sparrowwallet.com/docs/connected-wallet.html#bonus-adding-an-account. Try it, you will understand best by trying it.

As far as atomic swaps, are those the same as "no-KYC swap services"? are those the same as "aggregators"? It's confusing differentiating all of these.

No, they are not. They are completely different services. Some classes that are relevant:
1) Atomic swaps, for example those that serve XMR <-> BTC. Here the limits are technical, and liquidity. You are not going to find various routes for different coins or tokens, depending on what you have and need. However, you get the most anonymity here.
2) Decentralized bridges, for example those related to THORchain. Here the limits are related to anonymity, a technologically adapt observer can trace your routes. The benefit here is that it can not be stuck for AML/KYC reasons, and it would auto refund.
3) "No-KYC" swap services such as ChangeNOW. The downside to this is that it is centralized compared to the first two. In most cases you will not have any issues, but if you are unlucky or trigger the system in some way you will be forced to do AML/KYC or abandon the coins that you are currently swapping. Upside here: Only the service can de-anonymize you, and the coins that you receive from them are AML friendly.

Strongest anonymity: Atomic swaps.
Decentralized with many routes: Decentralized bridges.
AML friendly coins with most routes: Swap services.

That is how I would rate them in general. Please keep in mind the risks and disadvantages of the options, and use what you personally need -- don't listen to the biased idiots on this forum. I have used hundreds of services while testing systems in the last few years, I have very rarely encountered issues with anything and even in those cases there are many things that you can do. Experience is key, therefore pick something and start practicing with small amounts.

Anyway, nonetheless im interested in what AML checking services do you know, because like I said, from what I have read, the powerful AML checkers are reserved to professionals, so you would need to pay a lawyer/tax guy to check your addresses out if you want a real peace of mind, compared to some free AML checkers which we also don't really know how they work or who is behind. However doxing yourself to pay some guy to check your addresses on that professional software has risks in itself. What if you hold risky AML coins and they show up? It's a bit of a slippery slope, that is why I never saw a clear way to deal with crypto payments and been treating it mostly as a store of value and barely moving any funds.

I would not recommend doxxing yourself to some "guy" to do an AML check for you, it brings no advantages at all nor does it bring any guarantees of anything. This kind of service is more for the people that have not grown out of the thinking in "authorities" way, you know the kind of people that would ask their doctor how they should drink a glass of water.   Here are some right now, keep in mind that things change over the years (and I hope that I pasted the right links):
https://amlbot.com
https://www.scorechain.com/resources/crypto-glossary/aml-wallet-check-free

The best solution for this kind of topic for those that really need it is to be in the network of someone who has access to Chainalysis. I've had the best success with that, I don't remember a single case of coins that were graded as low risk by Chainalysis having issues later. Of course, the biggest obstacle here is getting access to Chainalysis.

[ABCbits]

3) "No-KYC" swap services such as ChangeNOW. The downside to this is that it is centralized compared to the first two. In most cases you will not have any issues, but if you are unlucky or trigger the system in some way you will be forced to do AML/KYC or abandon the coins that you are currently swapping. Upside here: Only the service can de-anonymize you, and the coins that you receive from them are AML friendly.

I want to add few things

1. I know you don't recommend ChangeNOW, but i believe everyone should not use ChangeNOW. Aside from accusation of shotgun KYC or stealing coin under prtense of KYC/AML check, they also lie being non-custodial service, https://bitcointalk.org/index.php?topic=5592492.msg67094753#msg67094753.
2. There are few swap services that claim you can do either free AML check before actually make any deposit or refund  any suspicious deposit. Either claim aren't 100% guaranteed, even if you use aggregator (such as OrangeFren), but IMO it's worth to be considered.
3. Coin received from exchange/swap service without strict strict AML/KYC could be categorized as suspicious or risky. An example from AML checker service,

Suspicious sources

Exchange | High Risk
An entity becomes high-risk based on the following criteria:

No KYC: does not require any customer information before allowing any level of deposit/withdrawal, or makes no attempt to verify that information.

Criminal Ties: Criminal charges against the legal entity in connection with AML/CFT violations.

Impact: High exposure to risky services such as darknet markets, other high-risk exchanges, or mixing is defined as a service whose direct high-risk exposure differs by one standard deviation from the average of all identified exchanges over a 12-month period.

Jurisdiction: based in a jurisdiction with weak AML/CFT measures.

Unlicensed: does not have any specific license to trade cryptocurrencies.

[Satofan44]

2. There are few swap services that claim you can do either free AML check before actually make any deposit or refund  any suspicious deposit. Either claim aren't 100% guaranteed, even if you use aggregator (such as OrangeFren), but IMO it's worth to be considered.

To be honest, if this AML/KYC was not a whole scam this kind of tool would be default on each website. That they make it hard for anyone to check on their own before actually sending coins tells you the real intentions behind the industry regulations.

3. Coin received from exchange/swap service without strict strict AML/KYC could be categorized as suspicious or risky. An example from AML checker service,

They will be categorized as low risk if we are talking about a big swap service, in the yellow category if color coded. At least that is how it was the last time I checked it. If it is some new, no name swap service then obviously it is going to be marked suspicious.

3) "No-KYC" swap services such as ChangeNOW. The downside to this is that it is centralized compared to the first two. In most cases you will not have any issues, but if you are unlucky or trigger the system in some way you will be forced to do AML/KYC or abandon the coins that you are currently swapping. Upside here: Only the service can de-anonymize you, and the coins that you receive from them are AML friendly.

I want to add few things

1. I know you don't recommend ChangeNOW, but i believe everyone should not use ChangeNOW. Aside from accusation of shotgun KYC or stealing coin under prtense of KYC/AML check, they also lie being non-custodial service, https://bitcointalk.org/index.php?topic=5592492.msg67094753#msg67094753.

It is a good addition to my post! I do not recommend any particular service, I just used one of the most popular ones as an example. Users can take a look at Trustpilot or Reddit and they will find nightmare stories for all of these services. There are many reasons for this, but they group into 2 large categories:

1. Illegal coins or suspicious behavior that triggers review (use of TOR being one example).
1a) The user is actually aware that they have illegal coins or suspiciously acquired coins, but they refuse to admit this and pretend to be innocent in public while blaming the service.
1b) The user is not aware at all that something is wrong with their coins, but they blame the service for acting on it instead of blaming the source of their coins.

2. The service trying to selectively scam to claim coins after sufficient time has passed. The users might not be able to provide the necessary documentation or in the case of criminals, they might not want to all.
Because of a combination of these two large groups of events, every single Swap Service is going to have many nightmare stories. Keep in mind that, when talking about legitimate services, we are talking about a very small % of transactions having issues, probably much fewer than 0.1% or possibly even 0.01%. Nevertheless, this is why it is important to highlight the disadvantages of each option and let the user decide for themselves what they want to do.

[BlackHatCoiner]

Tools that are industry standard rely on the same data sources, they don't have to use the same exact tool to see the exact same information

How do you know? I've heard plenty of cases of some coinjoined coins being treated as "tainted" on one exchange and "clean" on another.

If this was not the case, there would be complete chaos and it would be near impossible to use multiple reputable exchanges at the same time in any sane way.

I think it's pretty acknowledged by now that various exchanges will treat your coins as tainted, even though some others disagree.

If you don't believe in the theory/research, then you can do the tests yourself with some tools assuming that you have money that you could burn as an expense to verify it for yourself.

I don't have the time, but I do have read plenty of cases, and that is enough for me to comprehend that basically each exchange buys from different chain analysis firms, and each database may often be updated, for example after a certain hack happens.

[takuma sato]

Tools that are industry standard rely on the same data sources, they don't have to use the same exact tool to see the exact same information -- If this was not the case, there would be complete chaos and it would be near impossible to use multiple reputable exchanges at the same time in any sane way. Furthermore, experimental evidence will confirm it but you have to do it yourself. I have tried with countless transactions using clean coins, and sometimes with tainted coins to see what would happen down the road with one of these systems. If you don't believe in the theory/research, then you can do the tests yourself with some tools assuming that you have money that you could burn as an expense to verify it for yourself.

How do you know? im pretty sure the top tier tools for these things have privileged information. On the other hand, like I said, you have no way to know how free services are doing it. In fact, im sure top tier ones work with Chainalysis and others and have updated cross-chain databases.

Coin Control without accounts is for noobs, and mostly old timers that have outdated methods and knowledge tend to suggest people things like that. A single seed can derive countless addresses in countless accounts, so you would have something like this:
seed - coin - account 0
seed - coin - account 1


By using them this way, you can ensure that there is no leaking between your accounts. For example, account 0 can be your bigger hot-wallet stash. Account 1 can be restaurant payments. If you use accounts correctly no error that you commit within a single account will leak anything about the rest of what you have going on in the same wallet. Whereas with traditional single-account coin control, all you need is a single basic mistake to undo a lot of work and reveal a big portion of your history. Accounts are pretty easy to do in Sparrow: https://www.sparrowwallet.com/docs/connected-wallet.html#bonus-adding-an-account. Try it, you will understand best by trying it.
 

Never got around Sparrow Wallet. I think there's more risk in screwing up with a software you are not familiar with. I like seeing the complete list of inputs as seen in Coin Control of Bitcoin Core and just click whatever you want to use. If you label things properly it shouldn't be a problem. The accounts thing looks interesting tho. But multiple wallets is easy in Bitcoin Core now if you need that. If I have the time I will check Sparrow Wallet's account workflow and if it's good it could be suggested to Bitcoin Core and Electrum developers.

No, they are not. They are completely different services. Some classes that are relevant:
1) Atomic swaps, for example those that serve XMR <-> BTC. Here the limits are technical, and liquidity. You are not going to find various routes for different coins or tokens, depending on what you have and need. However, you get the most anonymity here.
2) Decentralized bridges, for example those related to THORchain. Here the limits are related to anonymity, a technologically adapt observer can trace your routes. The benefit here is that it can not be stuck for AML/KYC reasons, and it would auto refund.
3) "No-KYC" swap services such as ChangeNOW. The downside to this is that it is centralized compared to the first two. In most cases you will not have any issues, but if you are unlucky or trigger the system in some way you will be forced to do AML/KYC or abandon the coins that you are currently swapping. Upside here: Only the service can de-anonymize you, and the coins that you receive from them are AML friendly.

Strongest anonymity: Atomic swaps.
Decentralized with many routes: Decentralized bridges.
AML friendly coins with most routes: Swap services.

That is how I would rate them in general. Please keep in mind the risks and disadvantages of the options, and use what you personally need -- don't listen to the biased idiots on this forum. I have used hundreds of services while testing systems in the last few years, I have very rarely encountered issues with anything and even in those cases there are many things that you can do. Experience is key, therefore pick something and start practicing with small amounts.

Could you mention what you think the best services are for each option? Were would b1exch and Trocador.app fall there?

I would not recommend doxxing yourself to some "guy" to do an AML check for you, it brings no advantages at all nor does it bring any guarantees of anything. This kind of service is more for the people that have not grown out of the thinking in "authorities" way, you know the kind of people that would ask their doctor how they should drink a glass of water.   Here are some right now, keep in mind that things change over the years (and I hope that I pasted the right links):
https://amlbot.com
https://www.scorechain.com/resources/crypto-glossary/aml-wallet-check-free

The best solution for this kind of topic for those that really need it is to be in the network of someone who has access to Chainalysis. I've had the best success with that, I don't remember a single case of coins that were graded as low risk by Chainalysis having issues later. Of course, the biggest obstacle here is getting access to Chainalysis.

Depends on the context. Say BTC goes to $500,000 and you want to cash out some funds that are not KYC'd to buy real estate. Well, hiring a lawyer that has expertise in this field and has the top tier tools would allow you to produce a report that you can send to various compliance departments as needed. It's better than checking some random "AML checker" under a VPN or something. That's useful as a preview or funds you don't really need for anything relevant like paying for cheaper services, not doing a proper investment that requires big volume transactions. Like I said I really doubt you can compare these free AML checkers to the top tier ones which I assume have the most up to date databases that work with Chainalysis and have cross-chain information, plus if you are going to buy real state or something big you are going to be doxed anyway and would be best to work close with a lawyer expert in crypto and compliance, I would invest extra on this to produce the best report possible rather than use the free ones and send them to the CEX hoping you are not locked out and then hire a lawyer to try to send them a letter explaining how you acquired the funds.

[Satofan44]

If this was not the case, there would be complete chaos and it would be near impossible to use multiple reputable exchanges at the same time in any sane way.

I think it's pretty acknowledged by now that various exchanges will treat your coins as tainted, even though some others disagree.

Those are old times, and old stories and most often those stories are missing key details. If one exchange supports coinjoined coins and another does not, that has nothing to do with AML/KYC issues -- those are exchange-related policies and internal risk paramters. Of course, differences in AML "data are" possible if you compare a fully regulated exchange (both in the US and EU) with some random yet popular exchange that is registered in Mogadishu. Additionally, an exchange can flag you for whatever it wants, it can flag you for having an username that starts with a B. Neither one of those mean that properly regulated exchanges are not accessing the same AML risk data. I hope that this makes it clear now.

If you don't believe in the theory/research, then you can do the tests yourself with some tools assuming that you have money that you could burn as an expense to verify it for yourself.

I don't have the time, but I do have read plenty of cases, and that is enough for me to comprehend that basically each exchange buys from different chain analysis firms, and each database may often be updated, for example after a certain hack happens.

This is not true, it is based on a misunderstanding of the whole field. An exchange can decide its own risk parameters and other policies, that does not have any impact on the AML data. For example, an exchange can decide that any Monero swap coming from TOR or a VPN will automatically trigger an AML/KYC review. This again does not mean that it uses a different database, or that there is a "different" database. Many of the services even use the same providers to handle KYC, to whom you often also submit the AML data. Experimental testing over theory my dear, especially theory based on random user reports made by geniuses that have bought some scammed crypto for a discount and thought they could cash it out with a "no KYC" service.    We see a lot more on the AML side about people than people think, when you process countless millions of transactions you can figure out just about any pattern of behavior that an average person could come with -- yes, "they" know what those users are doing no matter how much people pretend that they are innocent in public.

How do you know? im pretty sure the top tier tools for these things have privileged information. On the other hand, like I said, you have no way to know how free services are doing it. In fact, im sure top tier ones work with Chainalysis and others and have updated cross-chain databases.

Experimental systems testing and sporadic access to Chainalysis. There is no logical reason for the top tier ones to keep information privileged, they are trying to sell their services to as many enterprise and institutional clients as possible. You are falsely assuming that these operate as some sort of honeypots, when they are just businesses built on evil ideas and like many other businesses they have an insatiable greed.

Never got around Sparrow Wallet. I think there's more risk in screwing up with a software you are not familiar with. I like seeing the complete list of inputs as seen in Coin Control of Bitcoin Core and just click whatever you want to use. If you label things properly it shouldn't be a problem. The accounts thing looks interesting tho. But multiple wallets is easy in Bitcoin Core now if you need that. If I have the time I will check Sparrow Wallet's account workflow and if it's good it could be suggested to Bitcoin Core and Electrum developers.

Accounts are one of the best features of wallet seeds, you really need to get around to learning it.

Could you mention what you think the best services are for each option? Were would b1exch and Trocador.app fall there?

I can't claim any services are the best, I can only tell you from the ones that I have experimented with what has worked for me in recent times. This is very different to users here, who will read some stories and then proclaim to know the truth about this service or that service -- which is completely false, and shows that they have no idea what they are talking about. Someone might have a lot of issues with 1 swap service, while another person may be moving millions monthly through it. This is how things actually happens in practice in a half-regulated, filled with tainted coins and AML/KYC bullshit space. I have had the best success with:

Atomic swaps: UnstoppableSwap.
Decentralized bridges: THORChain, and derivative services built onto it.
Swap services: Simpleswap. This is the most dangerous category. A properly decentralized bridge will simply refund coins that they can't process, it will be done automatically. There can't be any freezing of any kind, which is not true for this category.

Trocador.app would be an aggregator but I'd put it into the swap services, this is why.

Transactions made through our website enjoy our Trocador Guarantee, if for some reason you do not receive your funds and the exchange does not provide us sufficient proof of unusually high AML risk or that it was blocked by their Liquidity Provider's AML system, Trocador will reimburse you up to the insured amount.

As for b1exch, it seems to be some kind of hybrid swap service that shows decentralized features but is also centralized. I do not have enough information on how it actually operates.

Keep in mind DYOR, and no guarantees. If something goes wrong with a particular service it is your responsibility. Pick a category and run some tests with small amounts yourself and see how it works out.

Depends on the context. Say BTC goes to $500,000 and you want to cash out some funds that are not KYC'd to buy real estate. Well, hiring a lawyer that has expertise in this field and has the top tier tools would allow you to produce a report that you can send to various compliance departments as needed. It's better than checking some random "AML checker" under a VPN or something. That's useful as a preview or funds you don't really need for anything relevant like paying for cheaper services, not doing a proper investment that requires big volume transactions. Like I said I really doubt you can compare these free AML checkers to the top tier ones which I assume have the most up to date databases that work with Chainalysis and have cross-chain information, plus if you are going to buy real state or something big you are going to be doxed anyway and would be best to work close with a lawyer expert in crypto and compliance, I would invest extra on this to produce the best report possible rather than use the free ones and send them to the CEX hoping you are not locked out and then hire a lawyer to try to send them a letter explaining how you acquired the funds.

You got the order of things reversed. How do you think these things happen unless you are using specialized off-boarding services? You send a message to a CEX trying to comply in advance? For them $500k is nothing, especially since you are not going to be trading with it. First you would send the funds to the CEX, and then you'd be proving things after the fact. Whether your reports come from a lawyer or they are compiled by yourself, that makes no real difference to them. You would not be sending them a result of a free AML check or the result of Chainanalysis in any case. For example, someone who has bought these coins on another regulated exchange could simply have a single self-generated document by the exchange. Where is the need for the lawyer? Very few lawyers in the world specialize in crypto AML, there are a few more that are low-quality services / scammers but go ahead if you love authority figures. You can waste your own money on whatever your heart desires.

Those tools are only used for your own information in this context. You can check if some coins that you have received are tainted or have a higher risk, and then you can decide not to send those coins to a regulated platform to avoid a headache.

[BlackHatCoiner]

Those are old times, and old stories and most often those stories are missing key details.

How do you know this is "old stories" that belongs to the past? It's literally a black box. You get them rejected and you don't know why.

If one exchange supports coinjoined coins and another does not, that has nothing to do with AML/KYC issues -- those are exchange-related policies and internal risk paramters. Of course, differences in AML "data are" possible if you compare a fully regulated exchange (both in the US and EU) with some random yet popular exchange that is registered in Mogadishu.

This is a long way of saying that every exchange understands "taint" differently.

Neither one of those mean that properly regulated exchanges are not accessing the same AML risk data. I hope that this makes it clear now.

Let's assume that every exchange on the planet accesses the same AML risk data from only one chain analysis company. The fact that each practices its own "internal risk parameters" means that some exchanges will treat your coins as "tainted" as some others will disagree, just as I said.

And it's not true, they don't have the same "AML risk data", there are multiple chain analysis companies. It's all a giant BS sold by the US government to fund chain analysis and create fear mongering.