I have purchased my first crypto through a centralized exchange, located in one of my neighboring countries. I am located in the EU.
My strategy is to keep my first crypto investments as a base (no trades with the first BTC position) and to add to my positions throughout the years.
With what I have added, I will trade and take profits regularly.
The exchange that I am currently using is highly regulated/monitored and even has a simple button to calculate how much tax any user owes.
I have not traded anything on this exchange, to legally avoid taxation. So far I have done nothing against the law.
My idea is to withdraw the crypto assets from this exchange, onto my hardware wallet (this is partially done).
From here I wish to transfer the funds to an exchange that is not located inside the EU. Because for now, I believe that MiCA law allows for any IRS to inspect all European exchanges.
I want to transfer the funds to a non EU exchange, and trade there.
When I cash out my first BTC investment by 2030 or so, the bank will ask for my transaction history because trades are taxable. I intend to show them the history of the European exchange where I have not traded. Not the history of other exchanges, with no EU jurisdiction.
I have registered on Binance a year ago but my transaction to it did not come through.
I do have an account there.
Can I move my crypto there, trade, switch to stablecoins and keep them on a hardware device without expecting them to share it with foreign governments?
Upon request I believe they will share it. But my idea is that the government will not find out on which exchange I have traded. And if I never convert the profits from trades to cash, I don't think the bank will suspect anything.
By 2030 I can convert my first bought BTC from the European exchange, so it looks like I bought and held for 6 years (not taxable).
The remaining 0.75 BTC acquired from trades and profit taking I will not convert to cash, so it looks like I never traded. I doesn't give them the incentive to go looking somewhere.
I think that most people will find this a bad idea.
But I do wonder which centralized exchanges are the best ones for privacy. Maybe there is one with a location in Dubai, for example.
I know that there is DEX, but I don't have any experience with it and I am likely to make mistakes.