Hi all,
Sorry for the confusing title. I'll try to explain:
What if I buy some KYC Bitcoin through an exchange and then move it to a wallet. And then, let's say I either give some of that Bitcoin to someone else (maybe a charity or a friend), or use it to buy something (maybe a used car off Craigslist). At this point, from my perspective, I no longer own that Bitcoin (i.e. it is "beyond my ownership"). But now what if the person who now "owns" that Bitcoin uses it for some illegal purpose? I would have no knowledge of that transaction, but my KYC has "propagated" to the new owner. If that transaction were to be traced, assuming it hadn't been linked with KYC transactions with the new owner's identity, I would still be the last owner of the transaction from a chain analysis perspective, right? This is not something I've heard discussed before (but admittedly I'm new hear). Seems like a risk.
Thoughts?
Thanks.
First of all, I will like to correct the motion that there is nothing called "KYC Bitcoin" but rather we have Bitcoin that could be bought on an exchange that uses KYC (i.e Know Your Customer), whereby you are required to submit some documents to allow you buy, sell or trade Bitcoin. Secondly, the moment you gift your coin or it leaves your wallet you loses ownership of it to the next person.
However, I have seen situations whereby people get arrested simply because someone bought a coin from them through p2p with a stolen fund and when traced they happen to be the suspected victim, whereby in such case if only you could prove that you are innocent, you are likely to get allow free, which is why it's good to always use a reputable exchange.