Is KYC necessary for crypto-to-crypto exchanges?

[farosa]

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?

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.

[1715137539]

1715137539

[shield132]

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?

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.

[cokroalif]

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

[crzy]

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.

[Mila52]

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!

[Kemarit]

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.

[marcbitcoins]

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.

[Abiky]

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'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.

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.

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.