Are major KYC exchanges concerned about the source of your coins?

If I transfer a bunch of ETH or USDT to a big exchange like Kraken, do they actually check where it came from if it’s from a smaller non-KYC exchange like Blofin? What about if it was sent through a bridge?

Exchanges do have whats called "Know your transaction" (KYT) implemented. You can think of it as an automatic system that checks the source of the funds. Did it come from a mixer? a gambling site? an address linked to a terrorist organization, or maybe a hack of another exchange? etc. How much of a risk is it? High, medium, low? A transaction from a bridge or an unknown exchange would only raise suspicion if the original funds you deposited to the bridge, were suspicious for example, or if the crypto platform has been involved in something shady.

They care that’s why they are regulated and implement KYC to all their customers. You should use decentralized exchange if you don’t want any check like this. @omegastarscream said above is correct so don’t risk your money if you knew that your funds came from shady origin/tainted. I’m not sure what exchange Biofin is but it’s safe to avoid all CEX.

I don't think exchanges care about sending your coins from other exchanges. Exchanges only investigate the source of your funds when they suspect fraudulent activity or unusual transactions. In such cases, they may request additional verification beyond the standard KYC process. This is to comply with government regulations that require them to report suspicious accounts to the authorities. Aside from that, exchanges generally don't worry about where you're sending coins from, whether it's a smaller or larger exchange. Personally, I use different exchanges for various types of trading, including both decentralized (DEX) and centralized (CEX) exchanges.

How can they trace the funds to the source before the smaller exchange or the bridge?  A wallet funded from mexc just shows mexc as origin right?  Not previous hops?

It is not about if the coins are too much but even if it is a small amount of money, the exchanges still have tools that track the coin past transactions. Make sure your coins is not linked with something illegal. There is nothing to be worried about if you are doing nothing wrong or illegal. They have tools for it which their blockchain analysts can use for the tracking.

Possibly. A chunk of big or unbelievably big money let say $1m usdt in one transaction and the exchange noticed that your previous transactions arent like that of course they might do some follow up or asked you of some details. Better to send in smaller fractions or like what others said use some dex instead.

I use a lot of DEX but at some point need to get it back to fiat to send to my bank.  My funds arent shady but I do have a wallet that used a mixer one time.  Are all my wallets connected to that wallet considered tainted?  Thats why I am sending to smaller cex and bridges before I send it to the big exchange like coinbase or kraken How can they track it to before the small cex?  The small cex has pooled funds in a wallet they all send to and from.

They can be strict or soft with on-chain tracking to find Tainted coins. Bitcoin Q&A: Blacklists, Taint, and Wallet Fingerprinting. If you used a small non-KYC exchange, and withdraw it as your deposit to bigger exchanges, I believe that you will have no issue. The exchange from which you withdraw your coin must be not like a P2P exchange or mixers, if you don't want to have problems with your deposits. If you want to avoid risk, don't use these platforms as your temporary storage before you deposit your coin to a big exchange.

Kraken supports XMR, wouldnt it be best to just bridge to XMR or buy XMR on non kyc cex then send to Kraken?  That would be completely untraced to old eth wallets right?

I think you're overthinking it at this point. Exchanges do use sophisticated methods (Look into ChainAnalysis KYT, they used to have a proper page, but I can no longer find it) but simply using a mixer for example does not necessarily guarantee that your account will get locked. Pretty sure dozens, if not hundreds of people here have used mixers before. If you haven't done anything wrong, you should probably be fine. But at the same time, if you're really not willing to provide any kind of information to Kraken or any other KYC exchange, then you should probably stay away from them completely. It's not uncommon for exchanges to block a transaction for "extra verification" especially if the amounts involved are big.

Well I am worried because I already got kicked off of Gemini.  But maybe they have more stringent standards?  I will be dealing with large amounts,  what kind of extra verification would they require?

The source of funds would definitely be something they want to see. Where did the crypto come from? where did the fiat come from?  They can however and probably will drag this for a very long time (and we have seen many cases where this happens in the past). So again, if you're not willing to provide any of this stuff to them or you just don't want to deal with the headache and end up making multiple Reddit posts about this matter on /r/CryptoCurrency, /r/Kraken or /r/Bitcoin, tagging them on Twitter, and opening a scam accusation in bitcointalk etc. You should probably just stay away. I know I wouldn't deal with a fiat exchange with large sums of money. And then of course, if you're cashing out for fiat, you should probably expect a call from the bank as well. Unless you're used to transfer large sums of money and the bank is crypto friendly.

What proof do they require?  Seeing my tax returns for my income as well as the initial buys of the crypto from Gemini?  You say to avoid these kyc cex, but how else can I sell for fiat and then send to my bank account?

Some of the exchanges do care, and some of those doesn't really care at all. Some of those exchanges just pretend that they care but in actual they have no such mechanism to detect such coins. Especially, the new exchanges who doesn't have proper algorithms won't be able to find suspicious transactions. But, it's risky to deposit huge amounts of coins to those exchanges because they always lack liquidity.

They don't care from where it is coming as it might not matter to them from security wise but yeah somewhere for their reports and to advertise themselves they might say many people when withdrew their assets from Kraken they deposited them on Binance. Or from Blofin to Kraken (Never heard of Blofin before). I think they do care about the origin of the coin and its AML score like if the origin is from a tagged or a suspicios wallet like from some wallet which have black money or tokens hacked or scammed from others. Many exchanges have no allowed the deposit from those addresses as they can block so they blocked them. You can't send even some obfuscating platform's output money on CEXs. They want to know all about you.

So what should I do?  The wallet that might be tainted cause of using a mixer one time, just don’t send anything from that one to kraken?  Need some advice guys.

https://btrace.amlcrypto.io/ Is this an accurate way to know if my address is safe or not?  Any other scanners I can use?

Because of Regulations they care, and that's why they require you do KYC,  but are most concerned or pay more attention when it a transaction that involves huge amount of money. I believe they do this without you noticing with the help of some sophisticated system and further may have  a team that also help to checkmate such transactions.

As you mentioned that "when you send a lots of ETH or USDT" that's means there will be a huge amount that can be from also a hackers who stolen from exchanger or the money launder or funding for terr*orist organizations So if their blockchain transaction was suspicious and if the fund was big then the big exchangers always assume that an suspicious activity and then they will definitely ask for the additional document for that funds. As far as I before in the forum an seized mixer signature participants was asked for the additional documents for that fund who get from the mixers wallet for doing their signature campaign on bitcointalk so in my opinion yes they cares for the suspicious amount as well the suspicious activity.