Can someone explain/break down whether the following transactions result in breaking KYC chain:
1. Buy from exchange
2. Send lightning from exchange to Phoenix
3. Send Lightning from Phoenix to HodlHodl
4. Swap lightning to On chain
#asknostr
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Replies (5)
While this would break the kyc chain, the exchange still has a record of you buying it.
But that's about it right? Only issue is the top of the funnel. Person could buy it but eventually they don't know what happened to it? Person could have lost the coin, maybe it was stolen? There is some plausible deniability, do I have that right?
Employ services like Boltz.Exchange for atomic swaps between Lightning and on-chain Bitcoin, which helps maintain privacy as they do not hold custody of your funds
Tin foil hat time: Depending on your jurisdiction, the exchange may have to report the purchase to the government which puts you on a list. While they may not know what happened to the coins, they know you bought them at one point which might make you liable for taxes or become a target in the future.
Thanks!