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This shouldn't be a question. kyc is the illicit activity

While I agree with that statement, I was scanning Nostr to see how people approach it. Listening to many podcast, some do put emphasis on owning your key and self custody and some do go all the way to say never use exchanges with KYC at all, yet they do speak highly of Strike (which has KYC) which is somehow contradictory.... So I want to see how people approach it on the field. To give some context: I live in a country where spending bitcoin is a taxable event, so I will have to declare every year that I sell BTC in exchange for FIAT or goods. The government will know I have BTC that way. Buying on platform like nostr:nprofile1qqszw0ncsrfc6wd8lv3cal8cj4apkke8aqv3y75ys05h2st2p2g035spz3mhxue69uhhyetvv9ukzcnvv5hx7un89uq32amnwvaz7tmjv4kxz7fwv3sk6atn9e5k7tcpzdmhxue69uhhqatjwpkx2urpvuhx2ue0psxmsq, #Robosats or #Peach will protect me against the fact that my face photo with ID close to it leaks and other types of hacks but I also take the risk that when wanting to exchange my BTC for large FIAT sums (buying a car, a house, etc) the BTC gets flagged (this is BS but they do that) and I can't spend it. I do realise the importance of having some day to day BTC non KYC for spending (via lightning, eCash, etc) but isn't there a case also for building a "strategic reserve" of BTC through platform like Strike or " KYC light" platform such as Pocket (https://pocketbitcoin.com) ?

I'm operating under the assumption that kyc coins are lost coins. I think the time will come when every regulated exchange has to hand out their data to the government. And certainly some people will get visited by state authorities (punish a few to fear all). I totally get your approach to have a "state legalized" stack for big purchases. This is just not my way anymore. Maybe I'm fucked and I can only spend on black markets in the future, so be it. What lets you think you are allowed to spend your kyc coins as you please, the state could regulat that as well? Spending over 10.000 sats not allowed without permission, or taxed with 99%.

You are right. Nothing can guarantee that KYCed coins in self custody will be spendable at will in the future. However I think there is a higher risk that non KYC coins will be denied by exchanges. And then what do you do with it? Especially if you have a large amount. Then that sum is lost. But I don't have experience with this (yet). Hence I am calling out for help and feedback on what people have experienced in the past. See what works and what does not. Especially on large sums. If most people are (still) able to trade large sums of BTC to fiat from non KYC coin then my though process ends here. Small sums will never be an issue, you can always exchange back a few sats for couple $100 on P2P exchanges if you don't want to use it on marketplaces or gift cards Everything is a tradeoff. Just curious of which tradeoff people go for.