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Ask another way. When I add some sats here from Coinbase, even though zaps I receive are non-KYC, the fact that they are at the same address as my Coinbase sats… they are cucked right?

Enki 2y ago

I would say you pretty much have it correct. KYC laws are essentially attaching an identity to a particular wallet that you own and chain analysis companies can track the movement of those coins on chain.

So if you have a wallet that you have moved coins from Coinbase onto that's only one or two hops removed from your initial wallet on coinbase It's pretty trivial to track the movement of those coins. And if you add "non-KYC" sats to that wallet, you are proving that you own those sats to whoever might be watching.

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Discussion

Enki 2y ago

Thinking about it from a UTXO management standpoint, as long as you're not reusing your addresses, you can keep KYC and non-KYC UTXOs separate, but it's a massive pain in the ass to manage, at least in my opinion. That's why it's kind of helpful to have one or more wallets, one wallet dedicated to no KYC coins and one wallet dedicated to your KYC stack if you still have one.