Can I de-kyc my KYC stack? \ stacker news ~bitcoin

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2009 sats \ 68 comments \ @stack_harder 13 Dec bitcoin

ok, as Darth often says, don't link your identity to your stash, the problem is, for the past like 3 years, I have linked the shit out of myself from kyc buying on exchanges, I also committed the secondary sin of reusing the receiving address, because I figured, one less thing to get wrong and the gov could track it anyway if they really wanted to.

one of the reasons for this complacency was because these are quite small amounts of DCA we're talking about and I wasn't as deep in the trenches and didn't think about non-kyc purchases.

Anyhow, now I have corrected my ways, I was wondering, what, if anything, can I do with my OG stack? I don't plan on swapping it for fiat and ideally, it's like a retirement savings account and, IMO, by the time I retire, I will be able to spend on-chain or in sats.

Would I have to put it through a mixer or something, is it worth it? given that, again, the gov could say we know this was you, we traced to here, now what did you do with it?

If the fiat value of btc keeps going up and breaches a mil one day, I can only guess that what today is small, will be big and what is of no interest to a tax agency using every AI tool in the book today, may, one day, look very juicy.

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637 sats \ 10 replies \ @DarthCoin 13 Dec

Just use the Lightning Cleaning Machine method and you will be just fine.

Would I have to put it through a mixer or something,

Not mixer, but coinjoin if you really want to do that. Use Joinmarket if you know how to do it. But IMHO, just passing by LN is enough to break that link.

de-kyc my KYC stack?

And please stop saying this bullshit. There's no "KYC bitcoin". If that will exist, it means Bitcoin is dead, it exist 2 types of Bitcoin. This is a misconception and we should avoid saying that.

Yes, KYC is really fucking bad, but not for your BTC stash, but for your identity to be shared, sold, used without your knowledge and consent. Nobody can take your BTC you bought from a KYC exchange and then you withdraw them. NOBODY. And nobody can come to you to ask why do you bought them. Is nobody's business what you do with your own money.

I explained more things here: https://darth-coin.github.io/wallets/bitcoin-and-privacy-en.html

21 sats \ 0 replies \ @stack_harder OP 13 Dec

nice, i am going to digest this in full tomorrow and then start planning lightning washing my stack

10 sats \ 0 replies \ @Shugard 13 Dec

Thanks for your insight, Darth!

0 sats \ 4 replies \ @evanbaer 13 Dec

Agree re saying "kyc bitcoin" though not sure what to say in its place. Maybe "my kyc order history" ?

10 sats \ 2 replies \ @ek 13 Dec

just ignore him, everyone knows what you mean with KYC bitcoin

42 sats \ 1 reply \ @DarthCoin 13 Dec

noobs fall for this crap and will repeat it over and over without knowing what they say... then soon you will see them saying that "KYC bitcoin" is a token.

Don't you think this term was actually introduced into Bitcoin vocabulary by the same ones that want people to believe that exist 2 types of BTC? We should pay more attention to these things.

22 sats \ 0 replies \ @SatoshiNakanodo 13 Dec

I agree with @DarthCoin here. KYC is a term coined by the state. bitcoin is bitcoin. It is the fiat state that wants people to believe that KYC is clean and wholesome while non-KYC is dirty and bad.

I say "bitcoin" and "bitcoin linked to my identity". It's clearer.

0 sats \ 0 replies \ @stack_harder OP 13 Dec

it means bitcoin that was purchased from an exchange with an explicit link and record to my identity. semantics aside, i understand the btc is the same, but with kyc the record and amount is linked to my identity

21 sats \ 2 replies \ @Solomonsatoshi 13 Dec

Wrong. The tax agency of your country can ask if you have not reported the sale of the bitcoin you purchased via a KYC platform then where the fuck is it now ? ! ?

If you purchased via KYC no amount of coinjoining mixing obfuscation BS will remove the fact that your nations tax authority has been informed you have purchased that Bitcoin.

The only way to de KYC is to sell it, report the sale and pay due tax to tax dept and then re acquire Bitcoin via Non KYC.

On this Darthcoin, usually well informed, appears to be ignorant.

And upon Order 6102฿ the government will come asking will you surrender that ฿itcoin you purchased via KYC but have never reported the sale of???

0 sats \ 1 reply \ @chaum 13 Dec

Yes, very true, but this is a new technology the government is dealing with. Your stack could have been stolen, you could have lost your backup words.

0 sats \ 0 replies \ @Solomonsatoshi 13 Dec

You can try claiming it has been stolen and see how the tax department sees that. Did you report it when it was stolen?

If you claim your back phrase was lost if the Bitcoin ever moves since this is claimed you are exposed a a liar.

The government has been very proactive along with the banks in imposing KYC and promoting KYC in order to get nearly all BTC tracked and traced so if you think you have a found a loophole and can outsmart them try it on and see how you go- good luck with that.

31 sats \ 7 replies \ @Bitcoiner1 13 Dec

You can always sell all in a CEX and then buy back on a P2P market (lnp2pbot, Robosats, Hodlhodl, etc).

So, no Government will know that you now have BTC.

101 sats \ 2 replies \ @chaoticalHeavy 13 Dec

I got started with Bitcoin buying a little on Coinbase. I then switched to Bisq for person to person buying. My bank locked my account because of how I was using Zelle suspiciously. They showed me that they considered my account and my money as theirs.

The solution was to cut my bank out of the income stream. I switched my direct deposit income from my bank to Bitwage¹. All my direct deposit income goes straight to a cold wallet. I create a new receive address for each payment. If I need fiat I can have a percentage of my income sent to my bank.

I got this idea by reading Darthcoin's guides. ↩

31 sats \ 1 reply \ @DarthCoin 13 Dec

Bitwage is quite convenient and easy. And the catch is that the IBAN number is NOT in your name ! Few people realize that advantage. yes is KYC, but not so invasive and when you touch fiat world is KYC anyways, all over. Even if you use Robosats, hodlhodl, Bisq, the bank account you use is already KYC. Except if you use an old bank account from your grandma and she's already dead :)

I used Bitwage from 2015, I was one of their first users.

10 sats \ 0 replies \ @stack_harder OP 13 Dec

idea for a future guide: how to sign your grandma up for bitwage before it's too late lol

0 sats \ 0 replies \ @stack_harder OP 13 Dec

they would probably get me for tax if I did that and my own bank would probably call me in for interrogation and a mandatory anal probe if anything more than a few Gs popped up on my account, especially from Binance lol

0 sats \ 2 replies \ @DarthCoin 13 Dec

Sell? Are you out of your mind? I think you wanted to say the way around maybe, sell on p2p and buy on CEX.... anyways, better just use as money your BTC not sell back for fiat.

0 sats \ 1 reply \ @Bitcoiner1 13 Dec

No, I'm not out of my mind.

If you sell, the KYC problem is over.

I know, there are tax implications.

If the IRS or Government knows you bought some SATs and you have never sell it, maybe in a short future, they will ask about your SATs.

0 sats \ 0 replies \ @DarthCoin 14 Dec

I really do not understand why all people are fucking scared of IRS and gov. FFS just rebut their any authority over your BTC. They have none. Is so fucking hard to learn this stuff? The biggest threat is not a stupid gov agency. I really don't give a shit if a gov "knows" how many BTC I have. They can't take it from me and that's it. Guys, do your research and learn how to be a sovereign individual that do not have give any explanation to any gov.

Gov agencies do not come to your door asking for your BTC. They come to you because they know your are an obedient sheep that pays his taxes and if you don't do it, they threaten you. Learn to defend yourself from this mafia and rebut them.

21 sats \ 8 replies \ @cleaningup12 13 Dec

Bet you wish you hadn't asked now 🤣🤣

Rule 1 - read darths guides

Rule 2 - if you not sure see Rule 1

80 sats \ 5 replies \ @DarthCoin 13 Dec

But is a good question anyways. Is good when people ask and not blindly do stupid things.

20 sats \ 4 replies \ @Solomonsatoshi 13 Dec

But your advice in this case is flawed. Stop misleading newbies with flawed advice Darthcoin.

Once you have purchased BTC via KYC the government and its tax dept know you own that much BTC. Until and unless you report the sale of that BTC and pay tax if any due they will remain of the opinion that you own that much BTC- with good reason.

Unless you sell the BTC it remains KYCed and attached to your tax records in your jurisdiction. You cannot un KYC by any means other than selling and paying the tax due.

You could of course try the 'boating accident' ruse but even there if the KYCed Bitcoin is ever seen on the blockchain to move to any subsequent address you will be exposed as a fraudster and possibly prosecuted and even imprisoned for tax evasion.

10 sats \ 2 replies \ @daum3ns 13 Dec

What if i lost them, but mixed them before, so that they do not come up in the chain again... What if i just say, boah that bitcoin i have no idea i used it in that time to buy servers and stuff... After how many transaction is it no longer considered yours? Many questions regarding kyc on my side to be honest ...

10 sats \ 1 reply \ @Solomonsatoshi 13 Dec

If you used BTC to buy anything that is considered disposal of the commodity and liable for tax at the time of disposal. If you did not report that disposal you are liable for tax evasion. If you mixed the BTC before 'losing' it then you have failed to maintain sufficient records of the commodity and would potentially be liable for deliberate concealment of your commodity holdings and failure to keep adequate records of those commodity holdings.

The only certain way to un KYC BTC holdings is to sell and report that sale to tax dept and pay the tax due. Then buy again via non kyc means.

24 sats \ 0 replies \ @cleaningup12 13 Dec

Of course one could buy an 'amount' through fully kyc cex's and fully comply with local legislative taxation obligations. Obviously I'm not saying this would be a decoy stash

And one 'could' keep a non kyc fully private 'amount'

Not financial advice

0 sats \ 0 replies \ @cleaningup12 13 Dec

Should I buy a ticket and some 🍿 🤣🤣

10 sats \ 0 replies \ @stack_harder OP 13 Dec

I'm still reeling from my utxo questions lol

10 sats \ 0 replies \ @stack_harder OP 13 Dec

i will have to start reading those guides more systematically because at the moment a question pops up, then i read a guide.

@darth you should consolidate them into a kindle book, or ebook in general and name it something with a clever Star Wars pun

53 sats \ 6 replies \ @freetx 13 Dec

A simple way is to use Liquid with LN with AQUA wallet. (Liquid has cryptographically secure "Confidential Transactions" so there can be no tracing / analysis).

One of the keys is to avoid transacting the same amount in/out. In other words, if you are trying to gain privacy against chain analysis of 0.238 BTC - do not put 0.238 into and then directly take 0.238 BTC out of Liquid/LN/etc since it makes it obvious what happen.

Instead put it all in, but take it out in batches (at different times).

21 sats \ 0 replies \ @Manikese 13 Dec

Agreed and recommend.

10 sats \ 4 replies \ @stack_harder OP 13 Dec

i have aqua, but I don't really use it much, but in this case, are you saying do my non-kyc buys and receive in liquid lightning, then flip on boltz and cold storage

but if i did 100k stats , then do like 60 swap then 40 to add privacy from chain spying?

11 sats \ 3 replies \ @freetx 13 Dec

Yes, but I'm not sure you need to "flip on blotz". In Aqua there is a "swap" button that will swap between Liquid/LN and regular on chain BTC.

So you could go either way....receive via LN then swap-button back to BTC. Or reverse.... (note under the hood the "swap" button is using boltz, but point is its all integrated in a single app).

32 sats \ 2 replies \ @Signal312 13 Dec

Is it cheaper to just do everything in Aqua? I've been just using boltz, guess I missed the fact that it could all be done in Aqua.

44 sats \ 1 reply \ @freetx 14 Dec

I think Boltz is cheaper, but depending on the amounts may not be much. I think boltz is 0.1% (1/10th of a percent) I think Aqua is 0.2% (1/5th of a percent).

So for amounts less than 1M sats probably not a big difference....however certainly if you are trying to do 10+M sats its better to do it in boltz.

21 sats \ 0 replies \ @stack_harder OP 14 Dec

this is quite interesting actually, do they both use submarine swaps? or is there any difference in the way the swap is done?

1014 sats \ 1 reply \ @denlillaapan 13 Dec

sell; report the capital gains; buy back KYC free (work, Peach, ATMs etc).

Will be expensive af. And no guarantees they still won't come after yah

0 sats \ 0 replies \ @Solomonsatoshi 13 Dec

Correct.

30 sats \ 14 replies \ @Jon_Hodl 13 Dec

No, once your ID has been attached to a bitcoin purchase, there is no way to undue that.

The best you can do is to sell all of your bitcoin back to the same exchange you bought it from and then sell it so you have both a record of buying it and then selling it.

The next step is to bifurcate your stack and live a bitcoin double life but in order to do this, you need to be running your own node. https://www.whatisbitcoin.com/privacy/living-bitcoin-double-life

Once you are running your own node, the only person in the world who knows your wallet addresses and balances is you. Then you can begin to build a private stack that isn't attached to your identity.

21 sats \ 1 reply \ @stack_harder OP 14 Dec

thanks Jon, I plan on branching out into running a node next year, one of my new years resolutions lol

10 sats \ 0 replies \ @Jon_Hodl 14 Dec

Happy to help.

That sounds like a great New Year’s resolution.

0 sats \ 11 replies \ @028559d218 14 Dec

In my opinion this is not a solution. Bitcoin needs to come out of the shadows... so we can have 'real solutions' which don't include, in my opinion, having a 'double stack' that's 'in the shadows'.

How are people going to pay their bills, pay for a coffee, put gas in their car, while assessing the tax liabilities and reporting for every single daily small purchase?

The answer? It's completely impractical. Imagine the small business owner just trying to survive... the single parent paying their bills, the senior saving for retirement, or just trying to see their retirement nest-egg go as far as possible...

Using Bitcoin on lightning or other layers for daily, individuals purchases for all manner of things. Every single cup of coffee with 'capital gains taxes' for millions of people every single day for every single business? Really?

Privacy is one thing... concealing funds from thieves, hackers, or criminals. But taxes is some sort of compromise between government and citizens and we need more education advocacy and leadership.

Maybe the next administration (trump) as they completely burn down federal government to 'reform it'... will give Bitcoin better tax treatment. It wouldn't surprise me and I think it's eventually inevitable.

0 sats \ 2 replies \ @Jon_Hodl 16 Dec

Hey @DarthCoin how will we all pay taxes capital gains on every cup of coffee that we buy with bitcoin?

100 sats \ 1 reply \ @DarthCoin 16 Dec

only slaves pay taxes. If you didn't figure it out until now how to NOT pay taxes, then you still have a long way ahead...

0 sats \ 0 replies \ @Jon_Hodl 16 Dec

🎯

0 sats \ 7 replies \ @Jon_Hodl 16 Dec

It sounds like you want bitcoin to conform to the old ways of legacy finance. I want legacy finance to bend the knee to an open source math equation.

Privately owned bitcoin isn't "in the shadows". It's how all money should be. Neutral and private.

I would encourage you to read this paper. It outlines how bitcoin was designed to be used as peer-to-peer cash: https://bitcoin.org/bitcoin.pdf

0 sats \ 6 replies \ @028559d218 16 Dec

you cannot 'save the world' if you are in jail from tax-evasion.

it has been tried. it doesn't work.

we need a complete solution, political, economic, social, and most importantly educational

0 sats \ 5 replies \ @Jon_Hodl 16 Dec

I'm not talking about tax evasion.

I am talking about peer to peer cash.

Are you under the impression that the government should control bitcoin?

0 sats \ 4 replies \ @028559d218 16 Dec

you know exactly what i'm saying. buying a coffee is a taxable event, and mom-and-pop shops + small businesses don't really want to touch it until this issue gets resolved.

0 sats \ 3 replies \ @Jon_Hodl 16 Dec

So, you don't think mom and pop shops should use bitcoin?

It sounds like you think Government should own us all like slaves.

0 sats \ 2 replies \ @028559d218 17 Dec

i think they should. but i don't think they will, until the tax issue gets resolved.

and i personally believe it will but will take time

view replies

20 sats \ 1 reply \ @SwapMarket 13 Dec

It will be mad trying to tax unrealized gains of BTC in cold storage. To spend little by litthe just do swaps to Lightning or Liquid, the track will be lost.

0 sats \ 0 replies \ @028559d218 14 Dec

tax unrealized gains... lol.

The 'rich people' aka the cnbc crowd will never support it and so it will never happen.

38 sats \ 0 replies \ @BeeAye 13 Dec

u can gain fwd privacy but cant un-document exactly how much btc you bought, when and wherever you sent it to ( if off exchange).

i think this is your best option:options:

stop using kyc exchanges. start buying on p2p exchanges and start a privacy respecting stack, never mix it with your kyc corn. then, slowly start selling off your kyc corn and using proceeds to buy back in using p2p exchanges.

31 sats \ 10 replies \ @TheBTCManual 13 Dec

Even if you put it through a mixer/coinjoin you've already established that you've purchased Bitcoin, sure you can obscure the path on chain but authorities know bitcoin was bought and transfered and while it might not be the case they could come for their slice of the pie and force your de-anonymise your coins to prove you hodl it or pay the taxes

If they do claim you owe taxes if unrealised cap gains come though or some dumb ass rule, you can always offer them up cash or some other asset instead of doxing your stack, should that be the cheaper way to go

Only way to skirt that is to buy non-kyc, earn it directly or mine it!

0 sats \ 9 replies \ @stack_harder OP 13 Dec

do you think in this case, since I'm fucked, i could say i was hacked and the bitcoin is no longer under my control?

would the burden of proof not then fall on the authorities? or would they just monitor the address

if my country of residence ever came up with a tax non-released gains law, i'd leave i think, even though i have never declared my holdings on any tax return .

honestly, in a worse case, i can take a quick trip to Russia and go to one of the many crupto exchange and do something. none of them are kyc and i could say look, Russian hackers!

32 sats \ 8 replies \ @TheBTCManual 13 Dec

You could also say you lost they keys and just not move those coins for ages or swap the UTXO with a statechain with someone in another country lol plenty of ways to insert doubt of ownership.

Its good to think about all the possible attack vectors but I don't see them going so hard for your Bitcoin, they'll always try to go for the easiest paydays and theres way more of them out there

Bitcoin would need to be in the multiple trillions and by then you might even have purchasing power that allows you to turn laws in your favour

0 sats \ 7 replies \ @Solomonsatoshi 13 Dec

Very Bad Advice.

Try being a smart arse with the tax department and see where it gets you...

Most Likely Fucked.

0 sats \ 1 reply \ @TheBTCManual 14 Dec

Lol never said it was tax advice, thought we're just spitballing

0 sats \ 0 replies \ @Solomonsatoshi 14 Dec

Quite clearly you were advising on tax liability and ways to avoid/evade, but sure its all hypothetical and not too serious, unless someone acts on what you have suggested and lands in serious trouble.

0 sats \ 4 replies \ @stack_harder OP 14 Dec

I would say this is true of the IRS in the states, but in reality, most other countries are far from that aggressive, in the UK for example, you're allowed to come up with a repayment plan, happened to a guy I know. they don't just jail you

plus, i have no intention of actually selling and all my gains are unrealized so I'm not a criminal yet lol

10 sats \ 3 replies \ @Solomonsatoshi 14 Dec

True the severity of enforcement varies depending on jurisdiction. But as far as your posted question goes, its more or less impossible to un KYC KYCed sats- you must sell, declare any gains, pay the tax due, and start again via un-kyced purchases...any other option will involve risk of prosecution and criminal record at the least. Hopefully tax treatment will improve with at least some allowance for use of BTC as a MoE without the absurd taxation of each and every purchase made using sats- but there are no guarantees of this unless you move to somewhere that does allow it.

14 sats \ 0 replies \ @028559d218 14 Dec

THIS is what we need. Real reform so people can spend. Bitcoin 'out of the shadows' where every single business, every single individual, every single company has tax-favorable treatment... Bitcoin as moe with few/no tax requirements.

That is the future we need and should work towards, imo. Bitcoin the money for spending and saving for everyone who wants it. Spend it save it use it as money independently this is the outcome we should have as Bitcoiners imo.

0 sats \ 1 reply \ @stack_harder OP 14 Dec

yeah, but hey, if nothing else it's been quite interesting and might help a noob out who hasn't started stacking in earnest

0 sats \ 0 replies \ @Solomonsatoshi 14 Dec

Yes, let's hope so.

reply on another page

31 sats \ 0 replies \ @gnilma 13 Dec

There is no de-kyc-ing. Once the government knows how many sats you have, they know how many sats you have. That knowledge cannot be erased. If you sell to exchanges, that is what the tax man considers "realizing your gains" and be prepared to get tax if they ever look into it / if you ever get audited. It's good for you to keep in mind that going forward, you might want to stack in a non-kyc kind of way (which you seem to be already doing anyways).

If you want privacy of your sats obtained from kyc exchanges going forward, you can use coinjoin or pass the sats through lightning like what Darth said. That can help break the link between these sats and your identity going forward, which allows you to spend your sats in the future with more privacy. But what's in the past is already set and cannot be erased.

0 sats \ 0 replies \ @Skipper 15 Dec

Swap into liquid or LN and back to on-chain.

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