Admittedly I'm not an expert when it comes to blockchain technology. I just buy and sell bitcoin. That's what I know. But if you send coinbase coins to a personal wallet first before sending to a gambling site or whatever, I think that this will still show up in the "taint analysis". When I've done a "taint analysis" of some of my wallet addresses, there are a ton of links there. It's surprising. It just won't be as obvious to coinbase what you are doing compared to just sending coins directly to those kinds of sites.

I really don't think it's just the KYC stuff with coinbase though. Kraken and Gemini are both based in the United States and they're not as strict as Coinbase. I trade on Kraken and I never got in trouble there for selling on Localbitcoins and Paxful like you would with Coinbase. Though I haven't bought drugs, gambled, bought backpage credits or did any of that stuff with my coins from Kraken so I'm not sure how they feel about that. Do so at your own risk.

If you're going to be gambling, buying drugs, buying backpage credits, etc. your safest bet is probably to buy p2p. Localbitcoins, paxful, Mycelium Local Trader, etc. And it's probably best not to disclose to the bitcoin vendors on there that you are doing anything illegal with your bitcoins. I have had customers in the past admit to me that they are buying bitcoins for backpage. One even told me that she works at a spa. And we all know what goes on in there. lol. You're not paying for a RMT when you go to those places. You're getting a handjob with a happy ending at the very least. lol. And while some customers haven't told me what they were doing, it was obvious they were prostitutes, buying drugs or gambling (online gambling is legal in my country at least). I don't judge.

Most p2p buyers I'd estimate are doing something illegal with their bitcoins or gambling. Prohibition doesn't work. Drug addicts, gambling addicts, sex addicts who blow all their money on hookers, etc. need to seek professional help. But I don't see anything wrong with drug use, gambling and prostitution in moderation and (some libertarians/ancaps are going to hate me for this) with proper regulations in place.