My plan is as following.
Would this work if I want to be anonymous in this transaction?
Disclaimer: I’m not a cryptocurrency user. Maybe cryptocurrency users will correct me or advise better.
I don’t know how cryptocurrency exchanges might behave and how hostile cryptocurrency regulations are, but you might have a problem at step 1. If your exchange suspects you are trying to get Monero or do mixing or anything like that, they might block your transaction, stop serving you as a customer or report you to the government. Remember, they control your funds, not you.
You should be careful with the remaining steps too, specifically, your transactions and network traffic. If you do the steps in the same short period of time, the transaction amounts at steps 1 and 5 are similar, or there’s some other clue in your transactions that points to you or links the transactions together, your cryptocurrency exchange or blockchain surveillance companies might determine (at least probabilistically) that wallet B is owned by you. If you use the same internet service or VPN service to interact with the exchange and perform the transactions, those transactions could be linked to you via network layer data.
Aside: Step 4 says swap Monero to Bitcoin in wallet B, but aren’t Monero and Bitcoin wallets entirely separate things?
You can swap between either of them in a multi-coins wallet, like Exodus, for example. But it’s never be a good idea to swap coins in the wallet, as it’s a lot more expensive than in the swap website.
The only wallet that has the best swap rate so far is Brave Wallet. It’s still a little bit more expensive than some swap websites, though. But if anyone want to support the project, and for convenient, it’s a good choice.
Keep KYC in mind. Assuming you are in the US, you have to report sales of crypto currency, however you don’t have to report them if you are just moving your own coins (same coin) from one wallet to another. Assuming you are going all the way here, you’ll want to come up with something like this:
Or alternatively
More importantly, it’s recommended that you host your own node. If you have enough space on your device, assuming it has an SSD, then install it locally or alternatively you can buy an external SSD or you can buy a server and host a node there instead. (See https://kyun.host/ for an optimized server for XMR nodes)
If you are using a public node, use Tor and use a .onion node. Using your own node is better for privacy, given that the public node can see some information. See here for more information: jtgrassie comments on How secure is cake wallet?
Ideally, consider buying Monero using cash. See here for P2P options: Monerica - A Directory For A Monero Circular Economy
Edit: And don’t use unofficial 3rd party wallets. Stick to the Monero CLI or Monero GUI. Don’t trust anyone else with your coins.
I think Bitcoin is not the best choice for onramping/offramping your Monero. That’s because the transaction fees are quite high. Litecoin or another coin will probably save you some fees.
Although if you want to start with Bitcion, you could probably use the BTC → XMR Atomic Swap:
Do not use any swapping service, use their Atomic Swap feature. See this Monero Atomic Swap Tool: https://unstoppableswap.net/. This will prevent unnecessary fees and intermediates when using a commercial swapping service. The website is self-explanatory with detailed instructions for all OSes.
Source: Anonymousplanet.org