Isn’t KYC anti-ethical to Bitcoin?

[noorman0]

-snip
But as of recently, it is hard to purchase any crypto without encountering a form of KYC.

It just depends where you want to buy it. Because blockchain is censorship-resistant, transacting any cryptocurrency doesn't actually need any special identity verification. All you have to sacrifice is to pay a fee to the miner.

However, people limit themselves by relying on a centralized entity facilitated by the government. Yep, they have not left the traditional way completely and are not confident to be independent.

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[mk4]

Ahh, yeah the typical person never will as long as they are not earning in millions from the crypto. Lolz. Well, this is good one because I literally never cared for privacy of documents which I was uploading on the exchangers because I have always learnt about the exchanger first then did that action. I know there are many ways peeps can get screwed for uploading their KYC docs for example, ICO verification, airdrop verification etc. But obviously it is stupid to upload the docs to newly formed companies who are having fake profiles everywhere.

Here we are talking about crypto space where we have to buy pre-existing coins like Bitcoin, which is available everywhere and can easily bought with p2p, or trusted exchangers or even friend to friends to transfer for that matter.

As of me, I am not concerned at all.

The reason why some people dislike submitting AML/KYC documents regardless of net worth is because database leaks do happen even if a certain company/platform is 100% totally legitimate.

But yea, if you’re fine with the risks, then you do you.

[BlackHatCoiner]

If you use a centralized exchange, then you hand out many, important, personal stuff such as who you are. While you may achieve a significant proportion of anonymity (using CoinJoins, mixers etc.), it's still not enough to cover your untraceability. The fact that you've given away where you live, your phone number, your credit card / bank account, your identity etc., says a lot by itself. Those individuals behind the exchange can sell your info to even chain analysis companies.

So, I'd say that beyond purchases of cryptocurrencies, you should be really aware of who you're giving this sensitive information. Especially when you want to retain anonymity.

[Vaculin]

If you use a centralized exchange, then you hand out many, important, personal stuff such as who you are. While you may achieve a significant proportion of anonymity (using CoinJoins, mixers etc.), it's still not enough to cover your untraceability. The fact that you've given away where you live, your phone number, your credit card / bank account, your identity etc., says a lot by itself. Those individuals behind the exchange can sell your info to even chain analysis companies.

So, I'd say that beyond purchases of cryptocurrencies, you should be really aware of who you're giving this sensitive information. Especially when you want to retain anonymity.

If we think of bitcoin originally, it says freedom is what bitcoin brings, and for that being anonymous is free. But i think with a lot of exchanges that we have right now which are mostly centralized, then submitting a KYC form is a must and they say its all for security reason. Although we still have some exchanges who are not requiring KYC, but most of them are not even reputable. So the risk will be much even higher.

For me, although its really quite unethical when we think of bitcoin with KYC, but if we want more efficient and secured transactions, then keeping your privacy may not be fully realized as it is. So just always be cautious and even careful on the exchanges you are submitting your KYC, as sharing your private datas may be quite dangerous to think particularly if you are a bag holder of bitcoin.

[Gyfts]

OP I'm assuming you mean antithetical and not anti-ethical, but anyway, KYC doesn't compare well with BTC, they're two different ideas. KYC refers to an abstract concept involving anonymity, and Bitcoin itself isn't truly anonymous. Every transaction is logged publicly. To the extent you don't need KYC to own a bitcoin wallet is the line where your anonymity ends. Bitcoin is "more private" than traditional banking, I'm not arguing otherwise, but crypto mixers exist for a reason.

[Luzin]

OP I'm assuming you mean antithetical and not anti-ethical, but anyway, KYC doesn't compare well with BTC, they're two different ideas. KYC refers to an abstract concept involving anonymity, and Bitcoin itself isn't truly anonymous. Every transaction is logged publicly. To the extent you don't need KYC to own a bitcoin wallet is the line where your anonymity ends. Bitcoin is "more private" than traditional banking, I'm not arguing otherwise, but crypto mixers exist for a reason.

Yes, it is almost impossible for KYC not to be related to BTC. I think because we are in a rule that has been made to cause a sense of security and comfort (the rulegiver) even though sometimes it is very contradictory. We need the market, the market needs us, the market is subject to the rules, we are forced to submit to the rules by the market. If I didn't need it it seemed like I'd be out of this circulation, but it doesn't seem like I could yet. Conversely, if we break the rules then we lose, besides that we also feel uncomfortable with the security of our data. Something difficult.

[Finestream]

Ahh, yeah the typical person never will as long as they are not earning in millions from the crypto. Lolz. Well, this is good one because I literally never cared for privacy of documents which I was uploading on the exchangers because I have always learnt about the exchanger first then did that action. I know there are many ways peeps can get screwed for uploading their KYC docs for example, ICO verification, airdrop verification etc. But obviously it is stupid to upload the docs to newly formed companies who are having fake profiles everywhere.

Here we are talking about crypto space where we have to buy pre-existing coins like Bitcoin, which is available everywhere and can easily bought with p2p, or trusted exchangers or even friend to friends to transfer for that matter.

As of me, I am not concerned at all.

The reason why some people dislike submitting AML/KYC documents regardless of net worth is because database leaks do happen even if a certain company/platform is 100% totally legitimate.

But yea, if you’re fine with the risks, then you do you.

Yes. I also think that even how reputable the exchanges are, they are still not exempted from all forms of data hacking or stealing. So there are still risk every time you share your private datas on any exchanges you wish.

However, while most of us are still concern with this anonymity, others are not thinking of it anymore as long as they are making profits, then regardless of how many times they will submit KYC form. Better accept the fact that bitcoin is considered not totally decentralized these days, unethical to think but that's the fact.

[DarkDays]

Ahh, yeah the typical person never will as long as they are not earning in millions from the crypto. Lolz. Well, this is good one because I literally never cared for privacy of documents which I was uploading on the exchangers because I have always learnt about the exchanger first then did that action. I know there are many ways peeps can get screwed for uploading their KYC docs for example, ICO verification, airdrop verification etc. But obviously it is stupid to upload the docs to newly formed companies who are having fake profiles everywhere.

Here we are talking about crypto space where we have to buy pre-existing coins like Bitcoin, which is available everywhere and can easily bought with p2p, or trusted exchangers or even friend to friends to transfer for that matter.

As of me, I am not concerned at all.

The reason why some people dislike submitting AML/KYC documents regardless of net worth is because database leaks do happen even if a certain company/platform is 100% totally legitimate.

But yea, if you’re fine with the risks, then you do you.

Yes, KYC is not mandatory everywhere and you can choose to do it or not, though in some cases can severely limit one's choices.
As explained above, in some instances it is not about the KYC itself for one platform but more to do with the data leak.

As for the need to KYC, you can imagine that even for a decentralised structure like Bitcoin some platforms can't get away without KYC-ing their customers for providing certain services to them, and Bitcoin like most of the other crypto unfortunately falls into this category

[kryptqnick]

Many here agree that it's anti-ethical, but I'm not sure if I do. I'm not a fan of KYC, but Bitcoin wasn't created with anonymity in mind, and one could argue that transparency is more important. So KYC can be seen as acceptable as a way toward even more financial transparency. Moreover, you don't need to go through KYC to use Bitcoin. Many exchanges require KYC, but it doesn't mean it's impossible to avoid it, and owning a BTC wallet without any ID, sending BTC payments directly to others' addresses, is not a hard thing to do. I think that treatment of currencies should be fair, and what applies to fiat should apply to cryptos. What I don't like is when it's possible to exchange fiat using cash without providing an ID up to a certain amount of money, and yet some crypto exchanges impose KYC regardless of a sum in question.

[Leviathan.007]

Yes, certainly it is, the KYC is against the whole base of bitcoin if you ask me, bitcoin was created to provide p2p transactions and economic freedom for people all over the world so everyone in any country with any law and with any religion can use borderless transactions and have his own privacy but the governments and the related organizations are trying hard to force people to pass KYC and provide them personal information but still you can use decentralized exchanges and do anonymous transactions to keep them away.

[DooMAD]

Arguably, custodial exchanges are antithetical to Bitcoin.  Nowhere in the whitepaper does it say hand your BTC over to strangers on the internet (and you wouldn't be able to buy BTC from exchanges if people weren't doing that).  That was never part of the design.  As others have already said earlier in the topic, it's meant to be used peer-to-peer.  That means no middlemen!

You sadly have to accept the consequences when you freely choose to use it wrong.

[Akash1243]

You need to do KYC when you are converting BTC to fiat or vice versa as when you are dealing with fiat, government laws would come in. If you want to trade BTC without doing KYC you can use DEX or any P2P marketplace which dont need KYC like Bisq. But I dont think so, KYC is anti-ethical to BTC as BTC was supposed to be mined and traded among other people as currency, not to traded for fiat currencies.

[teosanru]

When i first heard about bitcoin, one of the selling points then was the pseudo anonymity. But as of recently, it is hard to purchase any crypto without encountering a form of KYC.

I’m just curious of everyone’s thought on this.

It's hard to purchase a crypto but once you are into cryptos doing transaction in Cryptos only it's not really that difficult to maintain this pseudoidentity, I personally feel that this KYC thing is somewhat necessary too because of scams and hacks that are happening around these days, and pseudo identity isn't really a very big requirement for 80% of the people, they are pretty okay with anyone knowing about their identity online and where they pay.

[LeGaulois]

Everyone talks about privacy but the point is not only about privacy, giving or not your personal info. It's also about the fact that you use a 3rd party to make a deal/transaction and that's exactly what Satoshi wanted to avoid.
A transaction from Alice, directly to Bob. Not Alice sends a transaction to ABCDcompany that checks the payment and then forwards it to Bob after checking, again, some info on Bob.
ABCD company can be a bank or any financial institution, an exchange platform, a person acting as a middleman,...

I believe anti-ethical is the wrong term. Centralized services are merely protecting their business. But if KYC, if possible, was coded in the protocol itself, and the developers claim "freedom", "hard money", "anti-censorship", then yes that would be anti-ethical.

This.
It could be probably better to use the term "against the ideology" but I agree with you on protecting their business. But that's not as if we didn't have any alternative to centralized platforms. The person using such are simply people who don't really give a fuck to some part of the ideology

When i first heard about bitcoin, one of the selling points then was the pseudo anonymity. But as of recently, it is hard to purchase any crypto without encountering a form of KYC.

I’m just curious of everyone’s thought on this.

To remain anonymous is only possible if people will not convert Bitcoin to Fiat. All things change when Fiat is already involved since it was already covered by the law. Since Bitcoin is a cryptocurrency, Businesses that accepting it needs to abide the AML policy to all there customer just have there business permit to operate. The idea of being anonymous Bitcoin is only within the Bitcoin blockchain itself and not on the outside market.

Not true.
banknotes can be anonymous. Gold, and other metals too

[Lanatsa]

When i first heard about bitcoin, one of the selling points then was the pseudo anonymity. But as of recently, it is hard to purchase any crypto without encountering a form of KYC.

I’m just curious of everyone’s thought on this.

Agree on this one and thanks to government on centralizing on everything that deals with cryptocurrency specially with Bitcoin and that do really sucks big time.
It might not be ethical but what can we do? Aside from p2p which is risky to do so we don't have any options but to deal with those platforms or
exchange on where we could buy bitcoin.
The only way to make yourself anonymous is to make use of those mixers or changing up wallets.

[blockman]

Yes.
It's all due to government restrictions and the exchanges are just following what the government mandates them. As mentioned, you will still be able to find some ways of doing it anonymously. But are people would care about what's being proud of by the early bitcoin folks about anonymity? What matters to these days especially to the new investors is bitcoin itself is an investment and that's it.

[Fortify]

When i first heard about bitcoin, one of the selling points then was the pseudo anonymity. But as of recently, it is hard to purchase any crypto without encountering a form of KYC.

I’m just curious of everyone’s thought on this.

It was inevitable and logical if you really think about it. I think that cryptocurrency has many useful purposes, however you'd have to be blind or ignorant if you expected criminals not to abuse it eventually. The average person is safer in the long run if you're able to see inputs and outputs. I don't frankly see much importance in anonymity unless you have something to hide and the majority of Bitcoiners will be working with traceable funds anyway. If you're trying to withdraw money after a large increase in value then it's fair that you should pay any local taxes that might be due because they help maintain the society that you're in. That generally leaves people who are trying to clean or move funds that do not belong to them into fiat currency and adding KYC actually benefits authorities in pursuing this type of thief.

[Botnake]

Yes.
It's all due to government restrictions and the exchanges are just following what the government mandates them. As mentioned, you will still be able to find some ways of doing it anonymously. But are people would care about what's being proud of by the early bitcoin folks about anonymity? What matters to these days especially to the new investors is bitcoin itself is an investment and that's it.

Right. Since they are centralized, so they are bound to follow the rules made by the government. For me, if its just for security reasons, then i think there's no problem about that. But knowing that we are giving our personal identities, then the essence of turning into bitcoin so we can be anonymous will already be lost. Or does it really matter nowadays? Maybe for early adopters here, yes it is, but for newcomers i doubt if they are still thinking or even affected by it. As long as we can gain crypto, well that's all that matters.

[BlackHatCoiner]

It's also about the fact that you use a 3rd party to make a deal/transaction and that's exactly what Satoshi wanted to avoid. n Bob.

I think that's a little bit closed-minded. Sure, transacting by using a third party definitely goes against the “ideology” of this innovative technology, but the thing is that you have to buy those coins from somewhere.

You may choose to not leave another one hold them, but you need an exchange to accomplish your purchase. The great downside is that you'll have to hand out this personal information in order to get your coins. So, you're already starting eponymously.

banknotes can be anonymous. Gold, and other metals too

I think what they say is the transition from bitcoin to fiat. That a third party is required.

[suzanne5223]

In every setting, a certain sacrifice is needed before the mainstream or adoption happens and this is something that has been discussed some times ago on this forum. However, it was the increase of crypto theft that make SEC to introduced KYC/AML to the exchange, and every exchange site that wants to keep operating must abide by the command.
Despite that, it's not hard to buy BTC without KYC but you have a price to pay for your anonymity though.