Excerpt
In this video, I explain how to use non-KYC bitcoin safely while protecting your financial privacy. I address the main concern people have—”tainted coins” and exchange rejection—and walk you through practical solutions that actually work.
Transcript
When you get bitcoin from an exchange, and it’s KYC’d, these exchanges use Chainanalysis, which is a tool that tells them that this bitcoin might come from a illegal, I don’t know, a fraud scheme or something, and it needs to be censored or banned. Regulated exchanges that do KYC have to do this. They have to follow that. But when you buy your bitcoin, like on a meetup, person to person, or from a Non-KYC platform like hodlhodl for instance, then you can’t be sure if these coins, where they are coming from. So it’s understandable that you are worried about that, because if you use those bitcoin then, and want to cash out with an exchange that’s regulated, they might tell you, no, this bitcoin are banned from our exchange, we don’t handle them, and now we freeze them. So this could happen. But the thing is, if you are acquiring bitcoin non-KYC, then you also either pay with it for something, or you find someone that exchanges it for you also non-KYC, where no one is doing these checks. I never had any problem to be honest. Maybe I was lucky because I earned bitcoin. So when you earn Bitcoin, then there is no KYC too. So I don’t know where these coins come from, and I don’t care, because I’m spending them again. And there’s no check on that, or I exchange it to euros or US dollars in Zimbabwe, and no one is asking. So that’s, in principle, not a problem, but you gotta know that this can happen. Yes, that’s true. The other thing that you can do with coins that you buy without KYC is, you could use a self-custodial lightning wallet like Phoenix or Alby, which is also self-custodial. And you send the bitcoin, you convert it basically into, you send it into the Lightning Network, and there it’s very private, as long as you don’t use Spark. And so that basically takes away that problem, because then you can also send Lightning Satoshis, Lightning Bitcoin to exchanges, or you swap it back to on-chain, and then you send it to the exchange. And then basically, there can be no trace of what the coin was before, who used it before you did. Another option, but I’m not 100% sure of that, but I think it should work, is that you swap it into Liquid, and from Liquid then back to Bitcoin, or you sell your liquid Bitcoin on an exchange, if you need to sell it, or if you need to transfer it or exchange it into fiat currency. So there are a couple of solutions, and I wouldn’t be too scared about that. One thing I also would suggest is that you have a little bit of like a percentage of your bitcoin is KYC, and a percentage of your bitcoin is non-KYC. So then you have both, and you are basically set up to use the KYC on the regulated exchanges, and the non-KYC, which is totally legal in private transactions, or when you pay for something, or you exchange it on a non-KYC platform. So there are a couple of options.
