Kraken supports LN withdrawals since a while. But for some reason, I haven't used it much.
But now I noticed: If I don't care that a CEX knows that I bought bitcoin there and only care that my bitcoin can't be traced... Why would I use P2P trading?
As I understand it, the only advantage of P2P trading in that case is that only the seller knows that I bought bitcoin but that he has to comply with LE is less probable than a CEX.
Am I right or wrong here?
The only bad aspect I see about CEX is that you have to do that shit KYC, no matter how you withdraw.
KYC is bad not because of the gov/ taxman, but because your data is in 3rd parties several hands and you don't know where will end up.

If you never sell back your BTC for fiat on those CEX, there's nothing to worry about gov / taxman. FUCK THEM.

I explained more details and aspects in several of my guides:
P2P exchanges are good for example when you want to:
  • not giving away your KYC data
  • want somebody else to pay your fiat bills and you pay them BTC
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If I already KYC'ed at a service, does it matter if I continue using it?
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The authorities know how much you bought on Kraken. Sending it out via Lightning doesn't necessary mean that your coin can't be traced. Might have to make at least a few hops.
P2P you avoid authorities/malicious actors knowing about your BTC
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Sending it out via Lightning doesn't necessary mean that your coin can't be traced.
Mhh, that's where I am stuck. Any link where I can read up on that?
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Im still learning about all this but using more private lightning wallets with a few hops in between is what i do.
I like OBW
You can get a hosted channel up to 500k sats, then drain it into your other channel.
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P2P you're really just distributing the risk of someone tying bitcoin to your identity, you are dealing with individual sellers so the transactions are distributed from different wallets, so it makes it harder to like to you.
You still need to do things like have multiple addresses for each transaction so you don't have outside links from different transactions since one bad incoming UTO or one bad spend could tie that all that stack to you, but P2P is a good start.
As for LN you can do P2P on a service like Robosats but you would need your own wallet, no sense buying on robosats and sending to a custodial wallet, who now has a record with an email and IP attached to it.
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Lightning is the best shot we have at breaking the chainalysis link of exchanges outflow. It's like a trojan horse to privacy.
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You're basically saying "if I don't care about privacy then why would I care about privacy" and expecting someone to convince you otherwise.
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No I am not. I think there is a difference between if the gov can trace the coins or if they can only tell I bought some at a specific date but nothing else. Privacy is a spectrum.
To my understanding, LN withdrawals should be more private. I am asking for confirmation on that.
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Oh yeah because they're totally going to treat you any differently.
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You are moving the goal posts. You still would say that I don't care about privacy?
They will have to treat me differently if they have less information about me.
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Yeah that sounds like a perfectly reasonable thing that a perfectly reasonable government would do.
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So you would say govs don't care how much information they have about someone and just treat all the same? So LE investigation doesn't matter? They can just do what they want without any consequences?
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Seems reasonable to me. There may come a point where LN service providers are pressured into sharing tracking data with exchanges (particularly the custodial wallets).
Funnily enough, Kraken forbids the trading of Monero and other privacy coins here in the UK. As LN grows and sees increasing usage on dark markets, we'll see a crackdown on Lightning-enabled exchanges too. Hopefully by then Robosats, Peach, Bisq etc. will be much larger, faster and cheaper.
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