What is the status on the legality of bitcoin and crytpocurrency in your country? In my country, it is perfectly fine to do so. A local exchange wallet allows us bitcoin users to easily have our bitcoins exchanged into our local currency, and we may retrieve this through remittances or have it transferred directly to our bank accounts. I don't see anything wrong with selling your bitcoins for cash, unless the mere possession of bitcoin is considered to be illegal in your country.
Correct. Check the legality in your country whether it allows any Bitcoin transactions, like trading, or bans it in any form. Take note, in some countries they banned only the ICOs. Meaning, Bitcoin and other cryptocurrencies that were offered are perfectly legal.
But if you have big amount of Bitcoins to sell, then you must take note that even though the transaction will be anonymous, your money will go somewhere that may alarm the government on when you got the money you are suddenly spending. My point is, if it is too big, pay tax. Personal income tax is filed and paid once in a year, the the case of my country. This will help you avoid unnecessary issues from the government and also big penalties to pay.