Re: Proof of source of funds requirements and bitcoin privacy

The only way to protect privacy is by trade face to face, but I'm sure people are discouraged to do it because it's not secure.

I said the same thing to myself; unless I'm mistaken, even if you trade face to face or OTC, there's no guarantee that the bitcoins you buy don't come from coinjoin or other tools. On the other hand, even in OTC, someone has to acquire them first, and I think that most of the bitcoins traded in recent years have come from CEX.

Basically, if bitcoins are transferred from an exchange wallet, they are already legal. The exchange does a great job as a mixer

If the bitcoins have an AML tag, they are first blocked on a third-party wallet and then transferred to the exchange's shared wallet. The exchange explains this by the complexity of storage on different wallets.

Even it is legal, someone can trace you because it comes from CEX.
I was speaking about privacy because zazad@ said "The only way to protect privacy is by trade face to face," . Wink

We live in different countries. If you promise confidentiality of exchange in Russia, provided that the coins are not criminal, but then transfer the information to third parties, then you will have to be afraid of suspicious people near your home, shady noises, etc. for the rest of your life. In my country, no one likes people who do not keep agreements regarding finances.