How to Make Your Crypto Untraceable — Transcript

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1. 0:00Most of us made the mistake of buying
2. 0:02our first crypto on a centralized
3. 0:04exchange where we handed over KYC, we
4. 0:08did the face scan, [music] which pretty
5. 0:11much linked our coins to ourselves
6. 0:13forever.
7. 0:14Worse yet, with governments increasing
8. 0:16crypto regulations left and [music]
9. 0:18right, I mean, some even trying to tax
10. 0:21your unrealized gains, the natural
11. 0:23question is, can we fix [music] our past
12. 0:26blockchain screw-ups? Is there a way to
13. 0:29sever the chain between ourselves and
14. 0:31our identity to keep our crypto
15. 0:33long-term and anonymously? And the
16. 0:36answer is yes, it's called chain
17. 0:38hopping. In this video, we'll break down
18. 0:41exactly what it is, how can you do it
19. 0:44yourself without needing a degree
20. 0:45[music] from Stanford or MIT, but most
21. 0:48importantly, how you can anonymize your
22. 0:51coins from leeches like the taxman or
23. 0:54your ex-wife.
24. 0:55>> [music]
25. 0:55>> But without further ado, let's dive in.
26. 0:59If you were smart enough to remove your
27. 1:01crypto from centralized exchanges before
28. 1:04DAC 8 and CARF kicked into force [music]
29. 1:06starting with this year, well,
30. 1:08congratulations. Technically speaking,
31. 1:10your coins [music] are not going to be
32. 1:12automatically reported to the taxman,
33. 1:15and yet they still reek from the perfume
34. 1:17of all of your past extramarital
35. 1:20affairs. I mean, the taxman, much like
36. 1:22your ex-wife, has a hundred and one ways
37. 1:25to make you sign that checkbook. Just
38. 1:27look at Europe and all those socialist
39. 1:29countries like Norway, Spain,
40. 1:32Switzerland, and they've all implemented
41. 1:34a wealth tax. Some have even gone the
42. 1:36extra mile, such as Denmark's [music]
43. 1:39tax authority, the SKAT, appropriately
44. 1:42named after animal Well, they are
45. 1:45taxing you on unrealized capital gains,
46. 1:48meaning even if you haven't sold those
47. 1:50coins, they'll treat it as if it were
48. 1:52sold. If you haven't made a profit, you
49. 1:55may still have to pay 44% tax. Now,
50. 1:59obviously, the most anonymous way to
51. 2:01hold your wealth is [music] in Monero,
52. 2:04which is why I'll be speaking at this
53. 2:06year's Monero Kon in Warsaw, Poland on
54. 2:09June 6th.
55. 2:11Since Monero's biggest bottleneck isn't
56. 2:13technical, it is cashing it out, the
57. 2:16talk is going to focus on getting it
58. 2:18into bank accounts, [music] into
59. 2:19property, into hard assets through the
60. 2:22carbon credit loophole. So, for those of
61. 2:25you interested in private [music] assets
62. 2:27such as Monero, the conference's link
63. 2:29will be in the description down below.
64. 2:32But, coming back to the topic, if you
65. 2:34did not hold XMR, if you have KYC'd
66. 2:37crypto, you can't anonymize it by simply
67. 2:40removing it from a centralized exchange
68. 2:42and then sending it around a bunch of
69. 2:44wallet addresses. They can still be
70. 2:47traced. I mean, they have entire
71. 2:49blockchain surveillance [music]
72. 2:50companies funded by the taxman's dollars
73. 2:53whose job is to scour the entire
74. 2:55blockchain with their software trying to
75. 2:58link these wallet addresses back to a
76. 3:01real [music] person's identity.
77. 3:03And I'm not going to bore you with the
78. 3:04technical jargon, but in simple terms,
79. 3:07the way that they track you is by
80. 3:09looking at your coins footprint. Much
81. 3:11like footprints in [music] the snow,
82. 3:12almost all the non-private cryptos, such
83. 3:15as Bitcoin, they leave a trail. So, if
84. 3:19you move your Bitcoin from wallet A to
85. 3:21wallet B, and then from wallet B to C,
86. 3:24the blockchain will show a continuous
87. 3:26path. And it doesn't matter if you swap
88. 3:28your wallet addresses, you can change
89. 3:31your shoes in the snow, you can [music]
90. 3:33walk around in circles, that can still
91. 3:35be linked back to you.
92. 3:37So, the question is, [music] how do you
93. 3:39sever the trail?
94. 3:41Simple. You're going to chain hop
95. 3:43through Monero.
96. 3:45And chain hopping is jumping from one
97. 3:46crypto highway to another. So, in this
98. 3:49case, you're going from the Bitcoin
99. 3:51highway
100. 3:51>> [music]
101. 3:51>> and temporarily swapping your coins into
102. 3:55Monero.
103. 3:56And Monero acts like an underground
104. 3:58tunnel, where you can't see what's going
105. 4:00on behind the scenes, because unlike
106. 4:03Bitcoin, it does not show who sent the
107. 4:05coins, [music] doesn't show who received
108. 4:07the coins, or the amount that was sent
109. 4:09in the first place.
110. 4:10And you're going to use that privacy to
111. 4:12your advantage by getting rid of those
112. 4:15KYC'd coins. You get your Monero, and
113. 4:17then from Monero, you can swap it back
114. 4:20into the coin of your choice. But note,
115. 4:22the crypto you will end up with will no
116. 4:25longer be your original coins. Now,
117. 4:28there are two main methods on how to
118. 4:29chain hop your coins. Naturally, you
119. 4:32will be using non-KYC'd exchanges. And
120. 4:35the first [snorts] one is through
121. 4:36instant swap services. These guys do not
122. 4:40even require you to make an account.
123. 4:42They don't ask for KYC. Instead, you
124. 4:45simply send your Bitcoin, and much like
125. 4:48an exchange booth at an airport, they
126. 4:50hold their own pool of cryptos. So, they
127. 4:53take from their own reserves, Monero,
128. 4:56and give it to you in return. That's why
129. 4:58it happens instantaneously.
130. 5:00However,
131. 5:02because the blockchain is public, the
132. 5:04enemy, chain analysis companies, they
133. 5:06can see that your Bitcoin has used one
134. 5:09of these swap services, because their
135. 5:11wallets are public.
136. 5:12And therefore, if, God forbid, you're
137. 5:14ever traced by these analysis companies,
138. 5:17they can subpoena these swap services
139. 5:19for any information they have on you.
140. 5:22Granted, they don't [music] collect KYC,
141. 5:24but they do collect metadata, such as
142. 5:26your IP address. So, from their [music]
143. 5:28perspective, they can see that Bitcoin
144. 5:31tied to your IP converted it into
145. 5:34Monero. They don't know what's going on
146. 5:36with Monero afterwards, because it's
147. 5:38untraceable, but the transaction itself
148. 5:41can rouse suspicion. That's why the
149. 5:44recommended route on the dark web is to
150. 5:46actually use decentralized peer-to-peer
151. 5:50marketplaces such as Redo Swap.
152. 5:53In this case, you're [music] trading
153. 5:55your Bitcoin for Monero with a random
154. 5:57Joe Schmo on the other side of planet
155. 5:59Earth. And from the blockchain
156. 6:01perspective, the enemy only sees your
157. 6:03Bitcoin going from your wallet to a
158. 6:05completely random wallet address. The
159. 6:08chain analysis [music] companies cannot
160. 6:10see your crypto going into Monero
161. 6:12because there is no middleman that's
162. 6:14logging all of that information. So, it
163. 6:17gives you far stronger privacy from the
164. 6:19Bitcoin to Monero side, though there is
165. 6:22a double-edged sword.
166. 6:24Because it is purely decentralized and
167. 6:26anybody can use the swap service, a lot
168. 6:30of hackers, ransomware guys, also
169. 6:32darknet marketplace vendors also swap
170. 6:35their coins through these services. And
171. 6:38there is no guarantee that the crypto
172. 6:40that you will receive in the end is not
173. 6:43tainted or dirty, meaning used with
174. 6:46illegal marketplaces. That's not a
175. 6:48problem on the Monero front because you
176. 6:50can't see the history of the coin. All
177. 6:53Monero is the same. There is no such
178. 6:55thing as a dirty or tainted XMR.
179. 6:59But it absolutely is a problem with
180. 7:00Bitcoin. That is why the more balanced
181. 7:03approach is to get your Bitcoin into
182. 7:06Monero through these decentralized
183. 7:08peer-to-peer marketplaces. You keep that
184. 7:10privacy, [music] but then when you want
185. 7:12to cash it out into the coin of your
186. 7:13choice, you use those instant swap
187. 7:16services.
188. 7:18And the reason is simple. All these
189. 7:20instant swaps, [music]
190. 7:21they usually have AML bots that filter
191. 7:24out the dirty coins. Therefore, the
192. 7:25coins that you receive have a higher
193. 7:27chance of being clean. Next, understand
194. 7:30that the enemy, aka the blockchain
195. 7:33surveillance companies, do not rely on
196. 7:36the transaction history alone. They use
197. 7:39heuristics, or in simple English,
198. 7:42educated guesses, probability.
199. 7:45And the way I can explain it to you is
200. 7:47say you have 13 and 1/2 Bitcoin, and you
201. 7:50convert it into Monero through one of
202. 7:51those swap services, [music]
203. 7:52and then 30 minutes later, you chain hop
204. 7:55it back into your original coin.
205. 7:58Sure, those new Bitcoin are not KYC'd,
206. 8:02and yet, from the enemy's perspective,
207. 8:05it looks like it's [music] still you
208. 8:07because in a very short amount of time,
209. 8:10there is one massive transaction that
210. 8:13sticks out like a sore thumb.
211. 8:15And most importantly, there are very few
212. 8:16people who even have a million dollars
213. 8:19to convert in the first place. So, even
214. 8:21[music] though definitively they can't
215. 8:23prove it's you, the probability is very
216. 8:25high.
217. 8:26So, what do you do about it?
218. 8:28Don't be
219. 8:29>> [music]
220. 8:29>> Instead of going with a million-dollar
221. 8:32transfer, you break it down into smaller
222. 8:34amounts. Say, 0.2 Bitcoin, you can
223. 8:38convert it into Monero,
224. 8:40>> [music]
225. 8:40>> and then you wait.
226. 8:41You wait a day or so before converting
227. 8:43it back into the coin of your choice.
228. 8:45You send it to a completely different
229. 8:47wallet address,
230. 8:48>> [music]
231. 8:48>> and you rinse and repeat with a
232. 8:51completely different amount the next
233. 8:52time. Say, 0.15 Bitcoin to a different
234. 8:56wallet address, and that is called peel
235. 8:59chaining. From the enemy's standpoint,
236. 9:01it is far harder to pinpoint that it is
237. 9:03you because you blend in with the noise
238. 9:05of the swap service. When it comes to
239. 9:07your first transfer, your job is to find
240. 9:10the best swap services based on the
241. 9:12fees, the reputation, as well as their
242. 9:15liquidity.
243. 9:16>> [music]
244. 9:17>> And some of the directories that will
245. 9:18definitely help you include
246. 9:20OrangeFriend, where they list all the
247. 9:22swap services that take Monero.
248. 9:25KYC Not Me is going to list [music] the
249. 9:28ones that may require instant
250. 9:30verification of your identity if the
251. 9:33amounts are a bit shady or suspicious,
252. 9:35aka shotgun KYC.
253. 9:38And BestChange.biz [music]
254. 9:39is going to list the exchanges reserves.
255. 9:42Now, while I did say that decentralized
256. 9:45peer-to-peer marketplaces, such as Redo
257. 9:47Swap, are great to get your Monero and
258. 9:50by all means for smaller amounts use it,
259. 9:53[music]
260. 9:54the problem is liquidity.
261. 9:56Simply put, very few people use that
262. 9:58service and therefore, if you have
263. 10:00six-figures or even seven-figures, it's
264. 10:03going to be very hard for you to find
265. 10:04the other person for your [music] trade.
266. 10:07That is why you're probably going to be
267. 10:09forced to go through those instant swaps
268. 10:11because they take larger volumes and
269. 10:13they're also faster.
270. 10:15Final point, a lot of folks on the dark
271. 10:18web, especially in the opposite bible,
272. 10:20they will recommend you to chain hop
273. 10:23through a virtual machine that is tied
274. 10:25to Whonix.
275. 10:26For most folks who are not operating a
276. 10:28darknet marketplace or shady, that's
277. 10:31overkill. [music]
278. 10:32We've seen in past law enforcement
279. 10:34cases, if the shady activity was [music]
280. 10:36caught, it was almost always because the
281. 10:39guy forgot to turn on his VPN or was
282. 10:42using his Gmail account.
283. 10:44So, solution is very simple but
284. 10:46effectless.
285. 10:47Don't be a drunk Colombian, use your
286. 10:50VPN,
287. 10:51make sure to chain hop [music] through
288. 10:53Tor because that avoids all those rookie
289. 10:55mistakes of having your Gmail account
290. 10:57logged in in the background, and of
291. 10:59course, make yourself a bunch of crypto
292. 11:01wallets where you're going to receive
293. 11:03those chain hopped coins and also get
294. 11:06yourself a Monero wallet so that you can
295. 11:08receive Monero.
296. 11:09>> [music]
297. 11:09>> And then you can start chain hopping. We
298. 11:11always begin with a small test amount,
299. 11:14say $80 to see how the flow goes with
300. 11:18each swap service and only then do you
301. 11:20gradually [music] increase the
302. 11:22individual transfer size. We're never
303. 11:24going above five-figures. [music]
304. 11:26Remember, we're trying to blend in with
305. 11:28the exchanges activity. We're We're
306. 11:30>> [music]
307. 11:30>> trying to stand out like a traffic cone.
308. 11:33And here's an interesting tip if you
309. 11:35have to use those instant swaps, which
310. 11:38is instead of doing [music] the entire
311. 11:40transfer on a single exchange, you're
312. 11:43going to convert some of your crypto
313. 11:45into Monero on one of them,
314. 11:47and then you cash out the Monero on a
315. 11:49completely different swap [music]
316. 11:51service. And you can rotate in between
317. 11:53them as many times as you want. The
318. 11:56point being that the enemy, [music] if
319. 11:58they were ever to use those educated
320. 12:00guesses or heuristics,
321. 12:02>> [music]
322. 12:02>> well, now all of a sudden they don't
323. 12:03have a straight line of sight where they
324. 12:05see a pattern where coins are coming in
325. 12:08and [music] coming straight out. So, God
326. 12:11forbid your coins are already being
327. 12:13traced, they have the IP address, and
328. 12:15they subpoena one of those exchanges,
329. 12:18well, each exchange only has a limited
330. 12:20[music] amount of information on you.
331. 12:22Once your coins have been successfully
332. 12:23chain hopped, they'll be sitting in a
333. 12:25bunch of fresh wallets,
334. 12:28and then the choice is yours whether you
335. 12:29want [music] to consolidate them into a
336. 12:31single wallet and hold your crypto long
337. 12:34term, [music]
338. 12:35or you can offer them some.
339. 12:36Talked about business structures in past
340. 12:38videos, but here's a directory with all
341. 12:41the crypto debit [music] cards that you
342. 12:43can still get to this day. Some of them
343. 12:46are non-KYC'd as well, but that is it
344. 12:49for this video. We hope to see you in
345. 12:50[music] Warsaw on June 5. If you enjoy
346. 12:53this type of content, you can share it
347. 12:55with a friend, you can [music] comment
348. 12:56down below, but we'll be seeing you in
349. 12:58the next presentation. Until then,
350. 13:01bye-bye.