In several ways, KYC (Know Your Customer) has nearly become synonymous with digital currency- basically, the majority of the crypto platforms these days request users to validate their identity before providing them access to their service. So now the question is can users bypass KYC authentication to purchase, swap, and trade cryptocurrency? Continue reading to find out.
Understanding KYC
Let’s begin with understanding KYC and why it is so common in the virtual currency world.
Know Your Customer, or KYC is a set of regulations designed to assist financial institutions in validating the identity of their users. Also, the institution can use it to measure the financial capability of a user and possible risk factors.
KYC authentication can require the following:
- Identity verification (government-approved ID such as passport, driving license, etc.)
- Address validation
- Biometric or facial scanning
- Mode of payment validation
KYC is usually completely automated. In the majority of cases, it only takes a few minutes for a device to check whether the customer is a real human being and whether the details he provided are correct. However, in case of a suspicious transaction, KYC can take a little longer, but these cases are rare and don’t affect 95 percent of customers.
Why Do Crypto Trading Platforms Insist on KYC?
As the digital currency has become more famous and mainstream, theft and money laundering cases have increased. KYC responds to that and the rising demands of regulators, particularly Western ones.
KYC protects cryptocurrency exchanges and other institutions from scammers wanting to acquire illegally earned funds. Also, it assists governments in tracking stolen funds and managing taxation. These things are essential for keeping the digital currency industry secure and crucial if cryptocurrency ever becomes mainstream.
Even though with KYC, virtual currency is much more decentralized and private than fiat assets, many users like leaving no virtual footprint. The validation procedure is an extra step users must take before starting crypto.
Fortunately, some methods exist to purchase and trade crypto assets without KYC.
Top No-KYC Digital Currency Exchanges
Following are some of the simplest methods to buy cryptocurrency without KYC.
P2P Trading
Peer-to-Peer (P2P) trading is one of the simple and reliable ways to buy digital currency without KYC. These crypto platforms connect sellers and buyers without involving in the transactions.
However, peer-to-peer platforms have a few limitations: they are less flexible regarding the kind of cryptocurrency one can receive, longer transaction time, and lower liquidity. There is always a risk of cheating, so users must check a seller’s reviews before making contact. In-person cash payments are the most secure mode of payment.
HodlHodl
HodlHodl is a non-custodial P2P platform that eases transactions between traders by providing them with a multi-signature wallet. They comparatively have a high fee of 0.6 percent but are split between the receiver and sender. Remember, they only work with BTC.
Bisq
Bisq is a fully decentralized P2P platform that connects cryptocurrency sellers and buyers without KYC. Part of the software arranges P2P users in a trustless yet safe and transparent way. The platform is also non-custodial and doesn’t keep its users’ funds, whether crypto or fiat currency.
Digital Currency Exchanges
Even though many cryptocurrency exchanges have some kind of KYC built in, it’s not a need, and most users will never need to pass validation. Centralized exchanges remain the simplest and most convenient way to obtain cryptocurrency and one with comparatively low trading fees.
KuCoin
Even though the KuCoin crypto exchange advertises it’s a platform without KYC, it is not. Although they do not need KYC to buy crypto, users still must pass authentication to move their assets. KYC is important to move above 2 BTC a day.
Changelly
Changelly doesn’t sell digital currency directly; instead, it does it through its trusted fiat providers. Each of them needs KYC validation. However, users can still purchase USDT or other cryptocurrencies on a Peer-to-Peer platform and use Changelly to swap it with any supported digital currency.
Digitex
Digitex is the best virtual currency exchange for users seeking unverified purchases. The platform removed KYC validation in 2020.
CoinEX
CoinEX is a famous no-KYC crypto exchange that provides margin and spot trading, along with trading on perpetual contracts. It offers many virtual currencies and tokens, such as its distinctive CET coin. Using CET while trading has benefits when it comes to commission fees. When using this exchange, there are fee triers for large trading volumes.
LocalCryptos
LocalCryptos allows users to purchase and sell virtual currency using non-custodial crypto wallets and a self-custodial escrow system, all backed by smart contracts. Non-custodial exchanges do not keep the private keys of their users. Being a Peer-to-Peer trading site, LocalCryptos does not have transaction limits, but users can have two offers for each combination of country, mode of payment, and kind at any given time.
Local Monero
LocalMonero is likely a widely-used and well-developed Peer-to-Peer Monero exchange in the Monero (XMR) community without KYC checks. Even though heavy in its restrictions on many digital currencies users can trade in, the platform allows users to initiate trade directly with another user. This makes the procedure quick and lean because the corporate overhead is absent.
Being a P2P crypto exchange, LocalMonero has zero transaction restrictions, even though there is a minimum trade restriction.
Also Read: 13 Best Solana Wallets of 2023
Decentralized Exchanges
While DEXs (decentralized exchanges) usually do not need users to generate an account or pass verification, they do not provide direct cryptocurrency purchases. Users can purchase digital assets on these platforms through stablecoins such as USDT or Tron.
dYdX
The dYdX DEX operates on the ETH network and enables users to trade tokens without a third-party intermediary. Unlike several DEXs, dYdX allows users to launch leveraged trading positions, which means users can trade on margin and add collateral. The platform doesn’t need users to do KYC.
Uniswap
Uniswap, the biggest and leading DEX, has not applied the KYC validation procedure. The exchange also receives support from its token UNI, which comes in the top 20 tokens by market capitalization.
Other Alternatives
There are some alternative ways to buy digital currency without KYC for those who do not wish to use an exchange.
Bitcoin ATMs
Users can use BTC ATMs to purchase desired virtual currency without KYC. Note, however, that a few of them ask users to go through KYC validation. Also, they have higher trading fees and are under CCTV surveillance, which makes these ATMs less private, even with KYC.
Direct P2P
Purchasing cryptocurrency directly from another user without an intermediary is the best way to bypass KYC verification. You can purchase from your colleague, friend, or like-minded user found on some discord server.
Trusting someone you do not know is difficult, particularly when there are zero reviews. Still, this method is worth considering if you have friends in the digital currency community. Just ensure to never send the assets to someone you do not trust, and never transact big amounts unless there is some kind of guarantee.
Benefits of Using Non-KYC Crypto Exchange
Below are some of the advantages of using a non-KYC digital currency exchange.
- Ease of Use: The non-KYC cryptocurrency exchanges are best for operating a hardware wallet. If you have one, handling the cryptocurrency becomes simpler and more secure. You can transact without KYC.
- Safety or Privacy: Not all need another financial organization or platform to follow their assets. Non-KYC virtual currency exchanges provide users the option to stay anonymous. A few provide branded cryptocurrency cards for daily use.
- Low Trading Fees: The non-KYC exchanges take lower fees than the popular ones in the crypto market.
- High Performance: Non-KYC exchanges ensure a rapid, secure, and convenient trading environment.
Frequently Asked Questions
Que: Are non-KYC crypto exchanges secure for trading?
Ans: Non-KYC digital currency exchanges are less safe than the platforms with KYC. However, it does not mean that non-KYC exchanges are not secure: users must be more careful when choosing a platform.
Que: What factors can trigger KYC?
Ans: It depends on the platforms and their policies. Following are a few reasons:
- If one user generates several accounts with one-time-use email accounts.
- If a user uses a suspicious crypto wallet address.
Que: Why do users wish to bypass KYC?
Ans: Many crypto enthusiasts want to bypass KYC verification to stay anonymous in the digital currency industry. Non-KYC exchanges allow crypto users to handle their private keys. It confirms that they do not interfere with users’ funds and transactions.
Also Read: How to Install MetaMask Wallet: A Step by Step Guide
Conclusion
Non-KYC cryptocurrency exchanges are those platforms that do not validate user identity. These exchanges allow users to bypass this process. Users can generate an account without KYC, but a few can have transaction restrictions. Digital currency exchanges are high-risk and offer a few non-KYC platforms to restrict transactions. For instance, they can restrict the everyday transaction limit. Read the above guide to learn more.
