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If bitcoin is converted to fiat money on an exchange, the exchange has irrefutable knowledge of your identity because they require the account name and bank account name to match.

The only way to anonymize a withdrawal of bitcoin-converted fiat would be to first transfer a non-exchange bitcoin wallet to the exchange-based bitcoin wallet using a bitcoin tumbler or mixer so that it looks clean. It would longer matter whether account names match to the withdrawer because the exchange, at least, would no longer know the real source of the funds. However, the fiat is still associated with your name. So the tumbler approach is not really anonymization, but merely anonymization of the source.

How else can bitcoin-sourced fiat be withdrawn anonymously?

user610620
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    You find someone who wants to buy your bitcoin in person for cash lol. – ieatpizza Jan 28 '21 at 18:56
  • I got what I need from the answer and comments below: Bisq, Hodlhodl, Paxful are non-KYC, decentralized peer-to-peer bitcoin-to-fiat exchanges – user610620 Jan 31 '21 at 17:52

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If bitcoin is converted to fiat money on an exchange, the exchange has irrefutable knowledge of your identity because they require the account name and bank account name to match.

Use Bisq and other non-KYC Exchanges. Also follow the best practices mentioned in this comment:

  1. Don't reuse addresses.

  2. Use coinjoin and payjoin when required.

  3. Run and use your own full node (with Tor), open source block explorer etc.

  4. Use an open source bitcoin wallet with active development: https://bitcoinwallet.guide

  5. Do not share information about your transactions on social media

  • Please note: This is meant to be a comment to @Prayank. It is an answer only because I am not allowed by this website to "add a comment" to his answer. Can you please tell me about the non-Bisq non-KYC exchange you refer to? I'm 99.99% sure that Bisq is unique in the world. Does the other exchange you mention exist or is it a "work in progress"? – Bitter Jan 29 '21 at 05:38
  • HodlHodl and Localcryptos are good enough if you can find offers else there are few mentioned here: https://github.com/cointastical/P2P-Trading-Exchanges Do your own research before using any of these. Basic due diligence is required while doing P2P trades. –  Jan 29 '21 at 05:49
  • But all of those (except for Bisq) are just centralized websites with "Register" or "Create account" pages that demand e-mail addresses, names and Google reCANCER? – Bitter Jan 29 '21 at 06:07
  • You don't need to use a real name or your email address associated with real identity. Not sure about captcha. HodlHodl has no KYC, you own 1 key in a 2 of 3 multisig as a buyer/seller. –  Jan 29 '21 at 06:57
  • Paxful is another P2P exchange that allows you to sell BTC for WU, PayPal, or "cash-in-the-bank," among other options, with no central authority, but they do require kyc on some transactions, so anonymous transactions may have to be kept small. – Robherc KV5ROB Jan 29 '21 at 13:48
  • @RedGrittyBrick This answer completely meets the definition of an answer since Prayank has clearly pointed out an example platform called Bisq that allows Bitcoin holders to convert to fiat without ID or KYC. Bisq has been around since 2014 and remains a leader for decentralized bitcoin exchanges, making the question *not* off-topic since this answer *will not change* "too frequently to be useful to others" according to your flimsy guidelines. Re-open the question now so I can mark best answer – user610620 Jan 31 '21 at 17:50
  • reading the first comment here by @Bitter, I realize this now. but penalizing a mis-placed comment or answer by closing the entire question still doesn't make sense – user610620 Jan 31 '21 at 18:07
  • ok with that behind us, @Prayank is it true that combining a Bisq trade with **Wasabi wallet** via the **conjoin** strategy fully patches up anonymity leaks? I actually don't even see how using Bisq alone could leak someone's identity https://www.youtube.com/watch?v=ECQHAzSckK0 – user610620 Jan 31 '21 at 18:23
  • To be honest, anonymity is very difficult using any technology. You have to take care of lot of things. One mistake in the way you did coinjoin or one mistake in something else could make it easier for someone else to analyze things that may end up revealing more information than you wanted others to see. I would suggest doing few test trades and then assume you know something about one trade, try to get other information. –  Jan 31 '21 at 18:49