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100 sats \ 3 replies \ @OT 29 Jan \ on: Tainted coins due to running an LN node? lightning

I think technically the coins never leave the channel. They get pulled to one side or the other.

I guess if a bad actor did open a channel with you it might be possible to be labeled as "tainted".

Tainted to who though? An exchange? The FBI?

One cheap way to find out is to send it into Wasabi wallet and try to coin join. If you get rejected, you know there's " taint".

0 sats \ 2 replies \ @south_korea_ln OP 30 Jan

Thanks, that's exactly what I had in mind. Indeed, coins never leave the channel, it's just a multisig between me and my channel partner. But indeed, if the bad actor is the one providing all the liquidity at channel opening and I end up with all these coins at the end, I could end up with tainted coins. Thanks, I'll check into Wasabi wallet, sounds like a cool trick. Were it not of course that then my coins will end up with the "coinjoin" label, which, unfortunately, is also considered suspicious by many exchanges.

Anyhow, lots of hypotheticals. Ideally, I never have to do the conversion to fiat.

100 sats \ 1 reply \ @OT 30 Jan

I think if your TX gets rejected in Wasabi you can still send it out without a coin join.

I personally like that coin joins are becoming more common. True that exchanges don't like it, but bitcoin isn't meant to go back into an exchange.

If you do have tainted coins I heard pegging into liquid and then back out will give you "clean" coins.

0 sats \ 0 replies \ @south_korea_ln OP 30 Jan

Good to know. Or I can just act myself as the aforementioned bad actor and loop out on-chain through some other LN noderunner...