If you’re concerned about the amount of data you give away to others, then you’re not alone. That is why this blog post focuses on the three exchanges that don’t need KYC checks. You can also find out all about KYC, why some exchanges use it, and why others don’t.
What Is KYC?
KYC stands for “Know Your Customer,” and it is a regulatory practice that is normally used in the world of stock investing. Any firm that is providing a regulated service is obligated to check the customer they are dealing with and ensure that they are who they say they are. This is done for a number of reasons, but most commonly the reason given is to prevent crime, fraud, and money laundering.
In the context of crime prevention, KYC is a good idea, but that isn’t all KYC is used for. Currently, crypto exchanges are being challenged legally to provide client lists to US authorities, just so they can tell who has cryptocurrency investments. The most recent case is the SEC applying for the customer details of the Kraken exchange.
There are many reasons why the government wants this information, but one big reason is that the IRS will be able to tax people’s crypto assets. The previously-decentralized concept of cryptocurrency is on the path to become centralized. As unfortunate as it is, traders should go ahead and familiarize themselves with the idea. At the time of this writing, taxation is already being implemented. Many of the popular tax programs such as TurboTax Online, TurboTax Deluxe and numerous other programs already ask tax filers if they have traded cryptocurrency.
Advantages of Avoiding KYC
A big concern with KYC is that there could be a data breach. Nowadays, data breaches are extremely common. Even the biggest firms aren’t protecting user data very well. When you consider that the information supplied in KYC are photos of official documents such as government IDs, driver’s licenses, and passports, you can easily imagine what criminals could use them for.
This is the primary reason people want to avoid KYC — because the way exchanges collect and store user data isn’t always as secure as they might have you believe. In fact, many exchanges are hacked for funds, so if hackers can access crypto funds, then it stands to reason they would be able to harvest data.
Sometimes users won’t have their IDs accepted by exchanges. Passports are only really sought by those who travel, and driver’s licenses are only needed if you drive. The last option exchanges offer are government IDs. However, you might be surprised to learn that there is a small minority of people without valid IDs. Of course, users could apply for these ID types, but that only adds more time to the process.
This brings us to a big problem with KYC — that it takes time to verify the information. And when it comes to crypto trading, taking advantage of a dip could be a very narrow window. This means that unnecessary delays are likely to cause investors to lose out financially because they miss golden opportunities while their IDs are being verified.
This is especially pronounced in Bitcoin trading, where a minute’s difference could equate to hundreds of dollars, and it is little wonder that crypto traders are seeking a cryptocurrency exchange without ID verification.
Top Three Exchanges Without KYC
These are the best exchanges that don’t require KYC. Make sure you read about each one as there is important information alongside each exchange.
Binance is a crypto exchange that has mixed reviews, and many US users find the customer support on the .us version to be problematic. The global Binance exchange works a little better because it is free of some of the restrictions that the US version has. It is also worth noting that if you want to withdraw currency that is over a certain threshold, you will need to complete KYC.
This threshold is currently two Bitcoin in a 24-hour period. It means that certain daily trade volumes will require you to complete KYC on Binance.
Bybit is a smaller exchange than Binance and has a smaller trade volume going through it. It is, however, a very popular exchange where users can buy/sell and withdraw crypto funds without completing KYC in most parts of the world.
Unfortunately, in some jurisdictions, you will still need to complete KYC with ByBit. It also completely blocks US users from transacting on the exchange.
Last on the list is Godex.io. It is a platform that has no KYC requirements whatsoever. It is also a very large exchange with high trade volumes and highly competitive pricing and fees as a result. Unlike Binance and ByBit, you can trade anonymously without limitations or thresholds, so if you’re a high-volume trader that wishes to avoid KYC, Godex is your best bet.
Another big advantage of Godex is that it doesn’t have any trading limits at all. Whereas other exchanges limit users to a certain amount of trade per day, Godex doesn’t. There is an extensive range of currency pairs supported on Godex too, so you’ll be spoiled for choice.