How To Buy Crypto Without KYC Verification

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How To Buy Crypto Without KYC Verification

Anonymity was one of the key features of Bitcoin which attracted early adopters. The world’s first cryptocurrency offered the potential to replace traditional financial institutions and effect payments without intermediaries or identification. Satoshi Nakamoto’s vision was coming along but then began losing momentum. Cryptocurrency adoption was being stifled by a lack of trust from governments and expert bodies, and so industry leaders had to make a decision. And thus the debate of whether one can buy crypto without KYC came about.

Most cryptocurrencies, led by Bitcoin began embracing due diligence measures, such as Know Your Customer (KYC). Others, such as Monero and Zcash opted to offer their users the ability to remain completely anonymous, even though doing this would result in the value of these currencies dropping.

Best Exchanges to Buy Crypto without KYC

While it is true a lot of research is involved when trying to understand how to buy crypto without KYC, there are well-established, reputable exchanges on the market that follow this practice. So if you happen to be a trader who would like to skip the whole KYC process, below is a list of the best exchanges to go for:

Binance

Binance Exchange

Popular with novice and seasoned traders alike, this exchange offers a variety of trading interfaces. If you consider yourself as an experienced trader, you can choose the advanced trading option, including margin trading. On the other hand, if you are relatively new within the realm of the crypto world, you can easily exchange any cryptocurrency for BTC or ETH. And if Bitcoin or Ethereum are not the digital assets of your choice, there are hundreds of altcoins available on the platform.

Binance is quite possibly one of the safest exchanges in the world, protecting its users’ accounts thanks to its 2FA (Two Factor Authentication) , making it next to impossible for hackers or fraudsters to steal information and surpass security.

ByBit

ByBit Exchange

Bybit exchange ensures it follows all the necessary security protocols. It does this by storing the majority of its traders’ funds on multi-signature Hierarchical Deterministic cold wallets to provide maximum security.

Moreover, it keeps only a small amount on hot wallets, allowing instantaneous withdrawals. Prior to a withdrawal request process, this exchange’s team scrutinizes all deposit, transaction and other relevant records, thus to further confirming the protection and security of assets.

Changelly

Changelly Exchange

Yet another exchange that provides security to its users, despite not having KYC protocols in place, Changelly is indeed considered a safe cryptocurrency exchange platform.

Thanks to its 2FA (Two Factor Authentication), it protects its account holders making it virtually impossible for fraudsters to gain access to sensitive information or to access traders’ accounts. Additionally, information captured on their website is transmitted over the secure, HTTPS network. And if that is not enough to put users’ minds at rest, sensitive information like credit card number, expiry date or CVV numbers are not stored on its servers.

BitMex

BitMex Exchange

Like the above-mentioned exchanges, BitMEX also protects its users’ accounts via 2FA (Two Factor Authentication). What’s more, it even offers the option of IP Pinning so traders are notified if a login is made from an different or unknown device. Users may even use the PGP encryption to avoid spam emails. To further confirm its reputability, BitMEX prides itself in carrying out 100 audits a second..

What is KYC and How Important is it When Buying Bitcoin?

When researching whether it is possible to buy crypto without KYC protocol, one must first understand what the process involves. Next, you need to understand who your users are and why they are using your platform. This process has existed for decades and is commonly used by banks, insurances and other financial institutions.

The primary purpose of KYC is to support Anti-Money Laundering (AML) measures as well as combating the Financing of Terrorism (FT). KYC procedures are in place throughout the world, but the way that banks, financial intermediaries and cryptocurrency exchanges carry out this process varies greatly.

KYC is an extremely vague term, and there is no list which exhaustively details all possible ways to carry this out. This is no different when investigating whether or not is is possible to buy crypto without KYC. As a result, most reputable organisations implement industry best-practices and processes developed internally.

One of the best reasons to buy Bitcoin from a known source is reliability. Users who have been vetted and are known to an exchange are unlikely to carry out any fraud. If they do, local authorities can be informed and take the necessary steps. This protects all users of an exchange, returning trust to an industry which has seen numerous scams and fraudulent transactions.

Why is it Difficult to Buy Crypto without KYC?

Although it was once much easier to buy crypto without KYC or anonymously, today it is much harder to do so. There are two main reasons for this change.

Increased Regulation

Several legislators have or are working on regulation to govern digital currencies, including exchange platforms and trading cryptocurrencies. Whilst a few countries still outlaw cryptocurrencies, the majority understand that the best way to manage this technology is to seek to regulate it. Even in countries where regulation is still poor or non-existent, such as large parts of the US, exchange platforms implement their own KYC procedures as a way to appear safer and avoid fraudulent users.

Bitcoin is Pseudonymous, not Anonymous

Bitcoin is Pseudonymous

One of the reasons why it’s difficult to send and receive Bitcoin anonymously is that, to a certain extent, this has never really been possible. The best way to describe BTC is not anonymous, but rather, pseudonymous.

A pseudonym is generally a fictitious name often used by authors. If the author’s true identity is discovered, then all books linked to that pseudonym can be automatically attributed to the author’s true identity. 

Similarly, your Bitcoin address is essentially your pseudonym. Every Bitcoin transaction is stored forever on a Blockchain, a public decentralised ledger accessible to anyone. All transactions which involve your unique address can be easily traced back to you, and it is even possible to use a Blockchain Explorer to search for them. According to cybersecurity researchers making the link between a user and a wallet address is easier than most people think

Why Might People Want to Buy Crypto Without KYC?

For those outside the cryptocurrency community, the main reason behind wanting to buy crypto without KYC is to process illegal transactions. Whilst there is certainly some truth in this, there may be several genuine and legitimate reasons to buy Bitcoin anonymously.

  • Owners of larger amounts of cryptocurrency understand that criminals could easily estimate the amount of BTC in their wallets. If they are able to learn who the user is, cyberattacks could become more targetted and effective.
  • There is a lot of distrust in governments across the world, so remaining anonymous is a way to protect oneself.
  • Some users just don’t have any official ID.

Is it Possible to Buy Crypto without KYC?

Screenshots are shown for illustration purposes only. Actual product may vary.

Today there are still a few ways to buy crypto without KYC. Bitcoin ATMs spread across the world allow you to exchange fiat currency in exchange for Bitcoin. No verification is required but strict limits are normally set. Until recently, it was also possible to buy Bitcoin on LocalBitcoins without KYC, but today you need to provide a minimum amount of information. Based on your trading volume, ID documents may also be requested.

Another option to buy crypto without KYC is to purchase Bitcoin derivatives. Several reputable exchange platforms offer these options, including BaseFEX, and Bybit. All three platforms offer you a free, in-built wallet to store your assets, along with access to a handful of other cryptocurrencies. By trading Bitcoin futures contracts you have the possibility to trade on margin, opening larger positions than you would otherwise be able to.

If you are not a resident in the US you can also buy Bitcoin anonymously using Bitmex. The trustworthy derivatives exchange offers some of the lowest fees in the industry and extends leverages of up to 100x your capital. The platform only supports crypto payments and deposits are free.

Pros of Buying Crypto without KYC

There are several pros to buying cryptocurrencies such as Bitcoin without KYC. These include:

  • Privacy – you are able to keep your personal financial information private
  • Efficiency – platforms which allow you to trade without ID are much faster to register with
  • Accessibility – if you are one of the billion people around the world without access to ID documents, you can still make use of cryptocurrencies

Cons of Buying Crypto without KYC

While there are certain pros, there are also significant cons to buying crypto without ID. These include:

  • Inefficient – the process of buying cryptocurrencies, especially less popular Altcoins, can be complicated or inaccessible without ID
  • Costs – platforms which allow you to trade anonymously tend to charge higher fees since competition is less than platforms which implement KYC
  • Limits – depending on the platform, you might be restricted to certain limits if you don’t present ID
  • Pseudonym – Bitcoin is not the only cryptocurrency which provides all of its transactions publically, so even if you opt to trade anonymously it might not be very difficult for others to link your transactions to you

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