Sending money anonymously in Canada is tricky but with the rise of decentralized finance and cryptocurrency in general, there are now lots of ways to send crypto anonymously.
In this article, we will go over some of the popular ways to send crypto anonymously. OCryptoCanada in no way encourages sending crypto anonymously and this article is for entertainment purposes only.
Is Crypto Anonymous in Canada?
Cryptocurrency is somewhat anonymous but not completely. Since every transaction is recorded on the blockchain, anyone can see details of transactions including the amount, date and time, and the wallet addresses.
It is therefore quite easy to track transactions to and from crypto wallets, but how can anyone know the identity of the wallet holders?
One way to find out the identity of a wallet holder is if the wallet is linked to a centralized exchange. Any reputable Canadian centralized exchange will require you to verify your account before you can trade. You will need to upload a copy of your ID, a selfie, and possibly some other identification such as proof of address.
Identifying the wallets of protestors on centralized exchanges during the truckers’ convoy was how the Canadian government was able to halt their transactions. They simply ordered the exchanges to freeze their accounts.
Additionally, transactions more than $10,000 must be reported by crypto exchanges operating in Canada to FINTRAC.
If you send crypto from a centralized exchange to another wallet, it is easy to link them back to your account on the exchange. People only need to look at the blockchain to follow the trail.
The Canadian government can therefore trace cryptocurrency transactions, but there are some ways you can send crypto anonymously.
How to Send Crypto Anonymously in Canada
You can use a decentralized exchange like PancakeSwap or UniSwap to buy and sell crypto. First, install a decentralized wallet such as Metamask to your internet browser and send funds to that wallet. Metamask is compatible with many blockchains including Ethereum, Binance Smart Chain, Avalanche, and Polygon, so you can trade numerous cryptocurrencies. Each blockchain will have its own decentralized exchange offering hundreds of tokens.
Getting funds into your Metamask wallet without first using a centralized exchange to purchase crypto is the hardest part.
Decentralized exchanges are not regulated or controlled by a centralized authority and therefore are riskier than centralized exchanges. There are many scam coins on decentralized exchanges so make sure you know what you are buying before you use one.
One way to purchase crypto anonymously with Canadian dollars is to use a crypto ATM. For these, you enter the amount you want to buy, scan the wallet address you want to send it to, then put cash in the machine. You could send this crypto to anyone with a wallet, or to your own decentralized wallet, but the fees are extremely high (as much as 20%).
A crypto ATM is by far the most anonymous way to purchase crypto, but it is the most expensive.
Another way to trade crypto anonymously is by using a peer-to-peer exchange like Localbitcoins. With these, you buy crypto directly from another person at the price they ask. There are various ways to pay including Apple Pay, crypto, or credit card, but crypto will be the most anonymous method.
Remember, any wallet linked to a centralized exchange can be traced, so again, using a peer-to-peer exchange may not be completely anonymous.
In some cases, sellers may agree to meet up in person, where you can pay cash. Of course, this might not be a comfortable option for everyone, but would certainly make it anonymous.
The bitcoin is held in escrow until the funds are cleared, making Localbitcoins safe for both buyers and sellers.
Monero is a privacy coin that uses a private ledger. With this, wallet addresses and amounts are not recorded in transactions. It’s therefore one of the most private cryptocurrencies out there and the number one way to send crypto anonymously.
You could purchase Monero using a centralized exchange and then send it to another wallet. The wallet address you send it to won’t be recorded.
The danger is that the Canadian government will ban privacy coins. While a ban could get it delisted from centralized exchanges and harder to buy, Monero will still exist.
A bitcoin mixer is a relatively new way to send crypto anonymously. Say you want to send bitcoin from wallet A to wallet B. You send bitcoin from wallet A to the mixer. The mixer takes your bitcoin and mixes it together with other people’s bitcoin before sending it to wallet B. This way, it’s impossible to tell where that bitcoin came from.
Mixers will usually have a time that you can set, meaning the longer you are willing to wait for the bitcoin to arrive in wallet B, the more anonymous it will be.
You can also use anonymous bridges. With an anonymous bridge, you can swap crypto across different blockchains without being able to trace where it came from. For example, you can convert AVAX to BNB. One popular anonymous mixer is Blockblend.
Keep in mind that any crypto that is mixed will not be able to be tracked by crypto tax software. Additionally, you may not want to put your crypto through a mixer if you intend to cash out and use the money for a mortgage. Since a mixer will prevent anyone from tracing the crypto’s origin, mixers are common tools used by money launderers.
You can buy gift cards using cryptocurrency from Coincards.ca. This website allows you to use crypto to purchase gift cards from hundreds of popular brands and businesses including Best Buy, Cineplex and Uber.
You can send your crypto from a private wallet to Coincards to pay for your order, and the gift cards can be used much like cash. You can give them to other people or use them yourself.
Is it Risky to Send Money Anonymously in Canada?
Sending crypto anonymously is no more risky than sending crypto normally. It is easy to get a wallet address wrong, or fall victim to a scam whether you stay anonymous or not.
However, the more anonymous you are, the less anyone can help you if you do make a mistake. Some centralized exchanges will have insurance in the event of a hack, meaning you could be refunded. If you fall victim to a scam and the thief moves funds to a centralized wallet, then you can get in touch with the exchange who might freeze their account.
However, if you plan to remain completely anonymous, then you won’t want to contact a centralized exchange for help, meaning your funds will be lost forever.
With peer-to-peer exchanges, you may have the option for meeting up in person with the seller to pay cash. This obviously has inherent risks.
Anybody can list a cryptocurrency on a decentralized exchange, and unfortunately, many of them are scam coins. A decentralized exchange won’t be able to help in any way, should you fall victim to a scam.
Crypto is inherently risky no matter what, but if you plan to send crypto anonymously, take extra care.
The more popular cryptocurrency becomes, the more inevitable regulations will follow. The more regulations there are the more difficult it will be to remain anonymous since governments around the world will want to keep track of your crypto in any way they can.
However, privacy and data protection is important to most people, so we may see even more ways to send crypto anonymously in the future.