Should I buy Monero from KYC exchange?

Privacy Questions
1

I found buying directly on a centralized exchange like Binance.com (which has KYC) got me more Monero for the same money than buying on Localmonero (no KYC) or swapping Litecoin/Bitcoin to Monero. What exactly would be the issue with that? Because my understanding is that all that the exchange knows is that you bought Monero, but then they can’t see how much is in your wallet or where you spend your money. You can also use subaddresses so that they can’t link it to you even if you have publicly shared your Monero address (e.g. if you have a “Donate Monero” thing on your website, and have made the mistake of publishing your primary wallet address rather than another subaddress). You could also have two wallets - one where you withdraw your new funds, one you use for payments - and transferring between the two wallets cannot be tracked.

And if you want to go the non-KYC route then you still need to consider that buying BTC/LTC you have the same problems with KYC although maybe there are more exchanges where you can buy them, and that any bank transfer or card payment you make could also link you. Basically you’d have to go to some guy with physical cash and swap that to digital cash (Monero).

So - unless you live in a country where crypto is banned - what’s really the threat model with buying Monero from a KYC centralized exchange?

2

Right… from our guide:

If using an exchange which requires KYC is an acceptable risk for you as long as subsequent transactions can’t be traced, a much easier option is to purchase Monero on an exchange like Kraken, or purchase Bitcoin/Litecoin from a KYC exchange which can then be swapped for Monero. Then, you can withdraw the purchased Monero to your own noncustodial wallet to use privately from that point forward.

If you go this route, make sure to purchase Monero at different times and in different amounts than where you will spend it. If you purchase $5000 of Monero at an exchange and make a $5000 purchase in Monero an hour later, those actions could potentially be correlated by an outside observer regardless of which path the Monero took.

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3

Beyond what was replied from the guide by Jonah, just have into consideration that once you buy on a Centralized Exchange you are tying the N coins purchase and possible ownership to your identity

The exchange and by extension the government, and/or any bad guy stealing getting and leaking that info (that could end up in $5 wrench attacks) are going to know you bought Monero or Bitcoin that you will coinjoin, you basically become a suspect, what are you going to do with that money? the gov could ask, if you bought that amount you surely may have more, a kidnapper would think.

Don’t forget that even if you get plausible deniability by buying a private asset or making it private yourself with good practices, you are still tied on the to that purchase.

Doesn’t matter how private is Monero, it can’t hide the fact that your exchange is probably saving reporting this info about yourself…

In the end is always better they never know you acquired this XMR, that is the end purpose of a CEX they can’t leak your info because they don’t store any. (Obviously you take your precautions, like not reusing addresses across exchanges and using a VPN/TOR so your real IP isn’t logged)

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