Hi apogio
but i guess there is a misunderstanding let me go explain some potential privacy risks, lets say you are using cex and if you withdraw from it repeatedly to the same wallet, or if you combine multiple known outputs in a single transaction. This could make it easier for someone (like an internal records) to link your activity and see who you are. This is a potential privacy risks for me and i wanted warn others. Thats why spending in parts could avoid this. (attention from the exchange or link to your activity)
Hi,
the thing with CEXs is that
thethey track (and they are supposed to track) every transaction their users make. So, if you deposit $500 three times and immediately buy and withdraw the XMR to your self-custody, the CEX will know the following:
(a) Trêvoid deposited $1500
(b) Trêvoid bought 2 XMR, then 2.1 XMR and then 1.9 XMR with this money, leaving them with a total of 6 XMR and $0.
(c) Trêvoid withdrew 1.5 XMR to address XYZ, then 2.5 XMR to address OPK and then 2 XMR to address UJM.
They have this knowledge and they can share it with any authority that can legally ask for it.
(fake) example story : a h*cker demands a ransom of $250,000 in Bitcoin, which is (lets say) 3.62 BTC and he is paid 3.62 BTC. He knows that Bitcoin is tracked and goes to an exchange that does not require KYC, any documents and exchanges his BTC for XMR in several transactions. Since he doesn't trust this exchange, he transfers XMR several times to cold wallets, and after that, he exchanges XMR for Bitcoin somewhere and sends it to Binance to withdraw these funds to his bank account. It seems like a complex chain: Bitcoin > XMR > XMR > Bitcoin and this can be tracked, all due to the volume and time interval (because it can link to your activity). The volume of $250,000 is quite large, and even if it occurs over a week, there may be only 1 or 2 similar operations for that amount, which greatly simplifies tracking, as such operations stand out among the mass of others.
What if you remove the red part that I highlighted in your text? If the criminal decides not to cash out on their crypto, then it's essentially a very difficult thing to track. It's almost impossible. The trigger point for the authorities comes from the fact that some user X, who can't justify their crypto income, suddenly send (even in small parts) $250,000 to a CEX to cash out. This
should make the CEX suspicious.