Using an exchange as hot wallet to hide the size of your stack
210 sats \ 4 comments \ @CheezeGrater 14 Jun 2022 bitcoin
If you're only interested in hiding the total value of your wallet, is using an exchange as a hot wallet to pay a third party a good way to accomplish that?
Besides KYC on the exchange, it seems like a good way to obscure the size of your stack without going into mixing.
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21 sats \ 0 replies \ @kilianbuhn 14 Jun 2022
Interesting idea. The problem you already mentioned is the kyc of the exchange.
Another problem that comes to mind are the transaction costs & time for onchain transactions. That wouldn't be a problem if you withdraw from exchange directly instead of sending to exchange and withdrawing again immediately...
It might also be against the rules of exchanges - most of the time they want to make sure you only withdraw to your own wallet?
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0 sats \ 0 replies \ @cryptocoin 14 Jun 2022
Your deposit transaction will lead to the exchange. Assuming your exchange has KYC, then either via data leak or subpoena, that also will lead to your withdrawal. So no, ... that gains you nothing and worse, gives a KYC exchange more info on you.
There's a reason CoinJoin (whether JoinMarket, Whirlpool, etc.) is fairly widely employed by those wanting to maintain their financial privacy -- because other methods are flawed.
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0 sats \ 0 replies \ @nerd2ninja 14 Jun 2022
Every Bitcoiner, when thinking about exchanges, should forever remember Mt. Gox.
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0 sats \ 0 replies \ @gms 14 Jun 2022
I would not recommend giving your money to an exchange but everyone does what they want with their money. When you deposit on an exchange these are not yours, they are already part of the exchange and they can sell them if they want. Withdrawal fees from exchanges are high for a reason, they don't want to give you your satoshis. They need liquidity to function.
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