The time has come to introduce a shady character.
Do you…
Use someone else’s dialogue to explain how this shady character is shady?
or…
Conceive a scene in which this character behaves in a shady way that foreshadows his role in the final conflict?
This one or that one?
Depends on the type of shadiness! And the part he has in the story!
Are we to be wary but not know exactly why? Have another character use dialogue…and then have the shady character be the nicest mother fucker in the room. We (and the character) are immediately not sure who to trust, and that creates some great tension.
Are we as the audience supposed to not trust him but the characters are, creating that dramatic tension? Let us see the shady actions, but not the character.
Is it setting up as the main drama, let everyone see the shadiness.
So yes. Depends on the part in the story.
Yes! Literally anything is an improvement on straight backstory in dialogue.