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20 sats \ 1 reply \ @nullcount 17 Sep 2023 \ on: Discussion on using Lightning as an alternative to CoinJoins bitcoin
The difference is with this arrangement, you're not actually breaking the history of your UTXOs. You're just trading one UTXO for another one with different history in a way that there is no on chain record linking your old and new utxos.
On chain, it appears the kyc'd utxo was paid to fixed float's address. And whatever they decide to do with that UTXO is also clearly readable onchain. In a coin join, the kyc'd utxo is one of many inputs to a coinjoin transaction and the outputs of that tx are unlinkable to the inputs.
Something like supertestnet's utxo dealership might be a cheaper/simpler way to trade utxos once its on mainnet and a market develops using that protocol.
Overall, this method is fine IMO for trading kyc for non-kyc coins. The kyc exchange still has record that you bought tho.
This method is less acceptable for "washing" tainted UTXOs. If law enforcement sees the utxo enter a fixed float address, all they have to do is subpoena fixed float for details on that swap. Then, they have a lead on the next hop in the trail. If you're using a custodial LN wallet to receive your fixed float LN swap, then they can also be subpoena for additional details and potentially find the next hop. Even muun which is non-custodial can be subpoena because a fixed float swap to LN muun wallet will have paid muun's public LN nodes and there is a record in muuns database which links that swap to a UTXO in your muun wallet.
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