Many exchanges now have pesky KYC checks. Some even go much further and require you to jump over various hurdles in order to make a transaction. In a world where people are becoming increasingly cautious about who they provide information to, it is little wonder that many people want to avoid KYC checks. This article goes into detail about KYC, why you might want to avoid it, and how to do just that!
What Is KYC?
KYC (Know Your Customer) is a form of regulation that means that organizations providing certain financial services have to make sure they know who they are providing services to. This is predominantly done to prevent money laundering or fraud, but it can also be used to track down individuals and charge tax.
KYC will normally consist of a basic identity check like providing a copy of a government ID, passport, or driver’s license. But sometimes these checks go much further, requiring selfies to verify the ID and even the completion of financial questionnaires.
Some of these questionnaires include very personal information, like personal income and how much you’re looking to trade in crypto. It might seem innocent, but in the hands of a tax inspector, it could be used as a heavy club. Data breaches across exchanges are also common, so the exchanges gathering all of this data could end up supplying criminals with your information when they get hacked.
Why Do Some Exchanges Require KYC?
In the world of cryptocurrency, KYC shouldn’t exist at all. You see, at the time of writing, cryptocurrency isn’t a traditionally regulated instrument, even in the US, the EU, and the UK. In some jurisdictions, there are grey areas, which means that many crypto exchanges now ask for KYC so they don’t draw unwanted attention to themselves.
Some exchanges are even very keen to become fully regulated and comply with all manner of bureaucratic checks to make sure customers are behaving as they want them to. Many times, this is done under the guise that it is safer for people to transact with people that have also passed these stringent tests. While this is perhaps the case, it doesn’t negate the fact that the tests themselves are very anti-privacy.
Many cryptocurrencies pride themselves on being privacy coins or tokens, but there is no way to maintain privacy if the government can track down who is buying those tokens at the entry and exit phase. This has created a portion of the crypto community that actively seeks to avoid these checks and champion privacy-based exchanges.
Thankfully, you can still find a platform that values privacy, like the crypto exchange without KYC – Godex.io.
Advantages of Avoiding KYC
There are three main advantages to avoiding KYC checks. These are:
• Convenience – KYC is time-consuming and often involves digging out photo ID. Once this has been done, you will need to photograph the ID and then submit it to be checked. This can take a long time to verify, by which point you might have missed that all-important dip you wanted to take advantage of when buying your crypto. Moreover, your ID can be rejected for any number of reasons. If this happens, then the whole process starts over, creating a very frustrating loop.
• No ID – There is a set list of ID types that exchanges find acceptable for KYC. While the list is extensive and will encompass most people, there are some that simply won’t have the ID required to complete the KYC tests. If you’re an individual without the right ID, you will have no choice but to seek a crypto exchange that doesn’t perform KYC.
• Intrusive – Any form of data collection is intrusive. As individuals, we have our own thresholds of what we feel is an acceptable amount of information to give away in return for the use of a service. KYC often probes into your financial means and ability to invest, something that many traders find far too personal, and avoiding this will be desirable for those individuals.
When it comes to KYC, there are good arguments on both sides of the debate. Hopefully, in the future, there is a middle ground compromise. Until then, for those that find KYC too intrusive, there are exchanges that don’t require these checks.
Can I Get Around KYC?
The largest and most reputable exchange that doesn’t require KYC is Godex.io. They allow you to exchange crypto with a few clicks and no checks whatsoever. All you need to do is select the currency you wish to exchange and the currency you want to receive, and then click “Exchange”.
No long forms to be completed about your income and no photo ID to be verified at all — just your wallet address and amount. It is the perfect way to stay anonymous and keep your privacy when using crypto exchanges.