Bitcoin Forum

Do you think it's necessary for a crypto-to-crypto only exchange (like Shapeshift) to require compliance with KYC/AML laws? AFAIK, cryptocurrencies aren't subject to the control of governments, since they were designed to eliminate middleman. Also, they're not considered legal tender and real currencies (unlike Fiat currencies like the USD).

Because of this, I wonder why governments are requiring KYC for crypto-to-crypto exchanges if cryptocurrencies are not issued or controlled by a central authority? Of course, this would be extremely necessary to implement within fiat-to-crypto exchanges, but I don't any reason why it’s necessary to enforce KYC/AML on crypto-only exchanges.

Can someone enlighten me about this?

I thjnk the purpose of KYC is to trace every transaction. Traceable  transaction can be used to detect any price manipulation. We know that pump and dump are very common here in cryptocurrency. They used KYC to prevent any pump and dump. Now, for some traders and investors, they don't like KYC that exposed their identity. So my stand here is neutral as of now. I still need to check further the pros and cons of KYC.

As of now, a lot of traders don't prefer KYC in their cryptocurrency transactions. And I'm not sure if most of them are in favor of having KYC in exchange of a more secured transactions or systems. For me, KYC is necessary for the ones who are putting up crowdfundings. But, for the traders, I don't think it is necessary.

KYC laws could be both good and bad, depending on the situation. For money launderers and criminals, KYC is good to help track and stop such individuals. However, if you're looking for privacy, then KYC laws are a bad bet. This applies specially to crypto, whose main purpose was to eliminate middleman. Bitcoin and other cryptocurrencies were designed in a way where it's not required to give personal information to use them. By requiring KYC on crypto-to-crypto exchanges, it greatly defeats the purpose, IMO.

I believe that the fairest approach would be to apply KYC/AML laws to exchanges that trade Fiat vs crypto, instead of crypto-to-crypto exchanges. Sometimes I wonder whenever atomic swaps would require to comply with KYC/AML laws, as governments worldwide see their true potential.  :-\



Yes. It's quite troublesome to go through all the process of KYC just to get into trading. I believe that KYC is well-suited for ICOs and crowdfunds, than crypto-to-crypto exchanges, IMO. I guess that we'll have to figure out how everything unfolds in the future, as governments try to apply proper regulatory measures for the Blockchain industry.  :)

For me Im KYC is good because in specific way. Like the bounty hunters who cheated in one campaign. But for me because I want security for my self so I don't like KYC if they inplemented to cryptocurrency. We have rights to hide our information and Identity. Im not against to KYC but in the other way I thinl they need to set that and they need to study where they implemented KYC and not.

KYC is only one way to know that your customers is human not bot, second thing is if something wrong happen ( specially with law ) there's proof to show who the player. KYC not easy because not all of us can accept it and scare if their data used for another purposes by exchanges. I believe many exchanges already comes up with no KYC, take one and do your activity.

Tbh I'd rather not send my personal details online to someone who I never met in real life. Most exchange requires KYC (even crypto to crypto) because they're afraid government will fine or shut them down. Oddly enough, some of them don't reveal their real identity too. Which is kinda saying something like, "hey I know you, but you don't know me. I'll take your money away after this".

Let's just use atomic swap if we want to trade crypto, no KYC (at least it should be) at all.

On the side you are right, you have good logic for this question. But I think KYC not only for that it also need to verify your account for future. Suppose you have lost your email or 2FA then when you will go to recover it then there will need KYC to know the real account owner. Maybe it could be one more reason for the KYC. If I am wrong please forgive me.

Im scared on sending my identity online even on bounty campaigns which requires "know your customer" policy. I sent once on ICO before token distribution and that did not follow a second time, after i sent it i felt like im going to be wanted on other country when they're going to use my identity on crimes.

In my opinion KYC is necessary in crypto exchange to avoid money laundry and others illegal activity. Mostly all crypto exchange required KYC for their member, this is good way to make crypto community better without any illegal activity that use crypto.

Centralized exchanges are obligated to comply with regulations from SEC and have to conform with the legal status of cryptocurrency in rge country of origin of each trader.
KYC is needed for large withdrawals, although not all centralized exchanges requires personal data.

For my point of you, KYC is prevent you from unwanted traces. But now traders are don’t ready to give their details to the third parties. If you need privacy in your crypto exchange ignore KYC, It depends upon your choice.

If that is also part for recovering your account and there's a good intentions regarding to this, having KYC and being fully verified won't scare traders to complete this process, but the logic is crypto practice anonymity and people who loves to hide their identity will go with crypto investment and continue enjoying being anonymous, the essence of crypto should be there and KYC can be less if the process will be between cryptos exchange.

I do not think that crypto-to-crypto exchanges will have a requirement for KYC. However, it seems that the government is pressuring lots of exchanges today, so I'm not be surprised that 90% of them will require it in due time. And this what bothers a lot of crypto purist. So to me we can't do anything and unless you doesn't want to convert your fiat to crypto then you can remain anonymous, but it has limitations and everyone would eventually succumb to this KYC/AML procedure.

I think when some exchanger force people to do some KYC there is regulation from government so they not need to shut down their services if they not do KYC from their customers. In past KYC only applied if we want to make our withdrawal limit bigger. CMIIW

In short, Government doesn't like anything beyond their control, and cryptocurrency is one of the problems. The solution that governments have is to forced cryptocurrencies users do a KYC verification for the majority of exchanges.

Exchanges forcing KYC verification has become common. It is a meaning concern for all of us, especially in the cryptocurrencies community to help develop and support atomic swap and decentralized exchange. Those things are underdeveloped far away, and require the community to support it.

You do not need to change your bitcoins to fiat in order to pay taxes neither. You still have to pay taxes on capital gain which means if you hold 100 bitcoins and for a whole year never buy or sell any bitcoins and still own 100 bitcoins after a whole year if the price of bitcoin increased that means you need to pay taxes on the gains you made on bitcoin even if you didn't sell them. That is why it is required to give your information to exchanges that are doing what IRS wants them to do and that way you will be traced and tracked down on how much of what you own so you can pay taxes and can't get away with it. You can always use other exchanges that are not in USA jurisdiction and that way you do not have to give any info to anyone. I use binance for example and never given even a single name for them, only email.

I don't like the idea of KYC but with growing crypto scams since then, how those crypto exchanges will protect their users?

People who got scammed will turn to government authorities and will seek for help because there are no crypto bodies and main institution in crypto. Because of this, government have no choice but to have a strict regulations for crypto exchanges.

Because of KYC, there are some solved cases in our local exchanges on where did the money went. It was successfully traced.

For now, Im fine with the system. And besides, at some exchanges, we can still withdraw without KYC. It's just that there is a limit. No way we can get full adoption without the involvement of government.

What I dislike is the difficulty to passed KYC even how clear your credentials is. It's take time and hassle if failed.

And pointing to Shapeshift, I dont like too the idea of having a KYC on instant exchangers. Their service is quite different in the usual crypto exchange.

KYC required in order to prevent money laundry but yes it's damaging crypto as decentralized investment.
Some government may require this because they also want to protect other people from harm but for me personally, I have no problem at all because I use crypto for right purpose not for bad crime,etc

I'm sure the market that only has services for the crypto-only exchange has a reason for this. According to me, just because there are no FIATs that they have, it does not mean they stop the KYC policy, besides overcoming AML, this KYC also functions as a prevention of manipulation by certain people.

Requirement may be for governments to register the payable tax. Because it is not possible to calculate how much tax you will be paid with public key.           
But if you are talking about exchanges, you can trade limited without verification.

Cryptocurrencies aren't offered by governments so it's not like they offered something and then lied you. If cryptocurrencies wouldn't be so popular and wouldn't get so much attention, then maybe we could keep situation like it was 3-4 years ago but everything good that gets abused is then controlled by government. There are shapeshift alternatives which don't require KYC, btw there are alternatives in any niche bot not great options.

KYC is needed to increase withdrawals, and also withdrawals with money, yes of course I do not agree if the market uses KYC, if trading is small

There must be restriction, since if you only use small money then it is better not to fill up the KYC form. Binance is a good exchange which don’t require you from filling up the KYC form, its good if you choose the right exchange. I think this is mandatory now on some exchanges, just be careful with your identity and money.

While personal documents and your identity are not protected by any guarantees and laws KYC can't be demanded on the exchange in small quantities .Another case when it comes to significant amounts. On many exchanges market  chang up to $1000 is simplified without KYC and its rightly!

There is one law which is the EU GDRP (General Data Protection Regulation). You can read everything here: (https://gdpr-info.eu/). This law came into effect May of 2018. Some important changes is that individuals specially those in the crypto sphere has the "right to be forgotten", meaning the right to request the deletion of personal data.

It was necessary for them as per regulation policies of their government. They are just following the mandate therefore there is nothing they can do but to comply. I see nothing wrong with the KYC requirements as long as we are legit people and there is nothing to hide but just make sure that the exchanges are legit so that our data will not be stolen.

I'm not happy with the idea either. However, considering that it's beneficial to keep track of criminals, I'd say that it's necessary for any crypto exchange no matter if it has Fiat trading pairs or not. For crypto purists, I think the best way to trade from one crypto to another would be via the use of atomic swaps. That's the only way to avoid all the KYC hassle, and to remain anonymous when trading cryptocurrencies.

At least, decentralized exchanges do not require KYC (as far as I'm aware) whereas centralized exchanges (like Shapeshift, Poloniex, etc) are obliged to comply with KYC/AML laws. But if governments decide to apply the laws to DEXs too, then the best way to escape this would be to do OTC or in-person trades.



With KYC now in motion for Shapeshift, I don't think that it can be called an "Instant Exchange" anymore. Before KYC came in, you could trade crypto within Shapeshift without the need to create an account. Now that KYC is enforced, you need to make an account to trade from one crypto to another.

Despite this, there are many other alternatives which don't require KYC (which makes them better than Shapeshift) such as Changelly and Sideshift.ai Which means, that people have a variety of options to choose from if they're not comfortable with KYC. :)