Anonymity vs. KYC: The Pros and Cons of Cryptocurrency Exchanges

[The Cryptovator]

KYC is usually bad for cryptocurrency users. Yet things never turn out the way we want them to. The amount of regulation that centralized exchange must comply to is low. Users are forced to submit KYC because of exchange terms and conditions, although there are no benefits to doing so. A centralized exchange would request KYC whenever they felt like it. Don't feel completely comfortable since those don't currently require KYC.

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[EXMON]

It's like when ya ride a bike; ya may think helmets arent kool, but they're necessary to keep ya from gettin hurt. So, before ya sign up for that sketchy unverified exchange without KYC, take a minute and consider that enablin KYC is a constructive and creativ way to keep yourself safe from any security breaches.

It may be news to you, but trading on the DEX does not require sending your funds to the exchange wallet or passing KYC.

And yet, if you ride a bicycle wearing a helmet and a truck runs over you, the helmet will not save you.

[Fatunad]

KYC is usually bad for cryptocurrency users. Yet things never turn out the way we want them to. The amount of regulation that centralized exchange must comply to is low. Users are forced to submit KYC because of exchange terms and conditions, although there are no benefits to doing so. A centralized exchange would request KYC whenever they felt like it. Don't feel completely comfortable since those don't currently require KYC.

There's no way on avoiding this considering that regulation do becomes strict specially on services and platforms which are involved or connected on cryptocurrency transactions specially on exchange platforms but somehow these kind of regulation does impose some security on users funds if ever these platforms do really make out some shady move.Yes, we arent that non knowledgeable when it comes on how DEX
works and yes its really something preferred if we do speak about total anonymity but since we are really that minding about having those fiat conversions then we wont really be having
no choice but to touch up these areas.

[Cryptoababe]

Honestly, I prefer an exchange without KYC. So far an exchange have proof of reserve, Im okay with that. Do you know that some exchange will just terminate your account because of some unknown fanancial policy even after KYC?
I know many  Binance account termination victims even after thier so called third level verification. Now, After having all these people information, they terminate thier account. This means that all these information can be used for something else without the owners knowing. Since I know this, Ive switched to MEXC Global. Ive been trading, depositing and withdrawing without KYC for years and Ive never seen any kind of data breaches since it was founded in 2018 and there is proof of reserve. So, I just stay away from too much KYC these days.

[stomachgrowls]

KYC is usually bad for cryptocurrency users. Yet things never turn out the way we want them to. The amount of regulation that centralized exchange must comply to is low. Users are forced to submit KYC because of exchange terms and conditions, although there are no benefits to doing so. A centralized exchange would request KYC whenever they felt like it. Don't feel completely comfortable since those don't currently require KYC.

There's no way on avoiding this considering that regulation do becomes strict specially on services and platforms which are involved or connected on cryptocurrency transactions specially on exchange platforms but somehow these kind of regulation does impose some security on users funds if ever these platforms do really make out some shady move.Yes, we arent that non knowledgeable when it comes on how DEX
works and yes its really something preferred if we do speak about total anonymity but since we are really that minding about having those fiat conversions then we wont really be having
no choice but to touch up these areas.

This is true and on point!

When you do buy crypto - Neither p2p or using exchange or services that using up CC/Debit cards.
When you do withdraw crypto to fiat - You would be making use of exchange platform.

You could do all of these things when you are kyc-verified which means that you cant able to proceed if you aren't that verified.
If you are really just making it use for trading coins without pulling it off and making it a fiat then verification wont really be
that much needed.

[LittleBitFunny]

Both CEX and DEX have their pros and cons, there is no winner when compared to each other. If you like privacy, don't want your identity to be sold on online websites, then DEX is the choice but DEX has a lot of limitations, if you are a trader, you make money trading, then you won't be able to do that with DEX. In contrast to CEX, they provide many services as well as convenience to use, but in return, we lose privacy, and we also do not have full control over our assets. I am a trader, so I still use CEX so far, I lost my privacy but in return, I feel satisfied with cex's services.

Change is inevitable, and it's no different in the world of cryptocurrency exchanges. With KYC becoming a necessary requirement for trading on most platforms, it's important to consider what the future may hold. As the need for security and safety increases, it's not hard to imagine that biometric data, including DNA, may be the next step in the evolution of exchange compliance. Are you prepared to adapt to these changing requirements?

Biometric data and DNA? Well, I haven't thought that far and I don't think it's going to happen that way. Yes, things change all the time, and we need to adapt but I don't like holding headlights in front of cars. I will watch how the world changes, and I will adapt accordingly.

People are annoyed with the KYC of exchanges, but to speak more broadly about the outside world. When you use technological devices such as smartphones, social networks, and government services, our privacy has long been stolen, not only in this crypto market. Our world is still a centralized world, and the government is running it all, they know all we're doing, we couldn't be smarter than them.

[michellee]

Honestly, I prefer an exchange without KYC. So far an exchange have proof of reserve, Im okay with that. Do you know that some exchange will just terminate your account because of some unknown fanancial policy even after KYC?
I know many  Binance account termination victims even after thier so called third level verification. Now, After having all these people information, they terminate thier account. This means that all these information can be used for something else without the owners knowing. Since I know this, Ive switched to MEXC Global. Ive been trading, depositing and withdrawing without KYC for years and Ive never seen any kind of data breaches since it was founded in 2018 and there is proof of reserve. So, I just stay away from too much KYC these days.

In many cases of customer identity abuse, we try to avoid KYC on many websites. Still, we can't do it, especially now that more and more exchanges require their customers to do KYC. But we are still lucky because we can still find exchanges that do not require detailed KYC and can use those exchanges to trade as usual. Hopefully, those exchanges can maintain their customers' confidentiality by not abusing it for illegal things. Hopefully, the exchange won't let hackers try to take it from the exchange server database.

[Bobrox]

I am used to with KYC on all cryptocurrencies exchange market and actually as arbitrage need higher withdrawing in daily day need to break KYC process, but for trader or user not agree with KYC have alternative and option with trading on exchange without have to pass KYC like Kucoin, MEXC and Hotbit.

But have little disadvantage with account without process KYC get limit withdrawing under 2 Bitcoin in daily day and if want withdraw higher amount need to upgrade by KYC processing. Binance have been adopted must KYC and not available withdrawing or trading if not pass KYC or upload document needed.

[EXMON]

I am used to with KYC on all cryptocurrencies exchange market and actually as arbitrage need higher withdrawing in daily day need to break KYC process, but for trader or user not agree with KYC have alternative and option with trading on exchange without have to pass KYC like Kucoin, MEXC and Hotbit.

But have little disadvantage with account without process KYC get limit withdrawing under 2 Bitcoin in daily day and if want withdraw higher amount need to upgrade by KYC processing. Binance have been adopted must KYC and not available withdrawing or trading if not pass KYC or upload document needed.

It's sad that people are so easily ready to give up their freedom in exchange for convenience. If a person chooses food between freedom and food, then he will lose everything over time, including food. It's a pity that many do not think about it.

[darewaller]

In many cases of customer identity abuse, we try to avoid KYC on many websites. Still, we can't do it, especially now that more and more exchanges require their customers to do KYC. But we are still lucky because we can still find exchanges that do not require detailed KYC and can use those exchanges to trade as usual. Hopefully, those exchanges can maintain their customers' confidentiality by not abusing it for illegal things. Hopefully, the exchange won't let hackers try to take it from the exchange server database.

It's not only about the potential abuse on why people avoid KYC but it's also because KYC is too hassle to do and then it invades ones privacy. We can't control the rise of the KYC on many websites but luckily there are still sites who don't comply with it. We can always choose to use those sites.

As long as the website is legit and you are willing to hand out your KYC, then you shall not worry because they won't likely leak you data to other companies that they know. It will be better if they store the KYC away from their server so that once their site got hacked, the users KYC's are still safe. Along with that is they must tighten their security so that hackers won't have the chance to access them.

[o_e_l_e_o]

As long as the website is legit and you are willing to hand out your KYC, then you shall not worry because they won't likely leak you data to other companies that they know.

Except they do. Every major centralized exchange has leaked customer data. Binance has been hacked for customer data. Coinbase admitted they sold customer data to third party without customer's knowledge or consent. Bitfinex, Bittrex, Kraken, you name an exchange, it's leaked user data.

It will be better if they store the KYC away from their server so that once their site got hacked, the users KYC's are still safe.

Just means that if their third party KYC processor is hacked, then your data is stolen that way instead. And we've seen time and again that most centralized exchanges are very lackluster when it comes to the security of their users' data. They simply do not care about your data or your safety, and are unwilling to spend any real money to make the process safer.

The only safe KYC is no KYC.

[michellee]

In many cases of customer identity abuse, we try to avoid KYC on many websites. Still, we can't do it, especially now that more and more exchanges require their customers to do KYC. But we are still lucky because we can still find exchanges that do not require detailed KYC and can use those exchanges to trade as usual. Hopefully, those exchanges can maintain their customers' confidentiality by not abusing it for illegal things. Hopefully, the exchange won't let hackers try to take it from the exchange server database.

It's not only about the potential abuse on why people avoid KYC but it's also because KYC is too hassle to do and then it invades ones privacy. We can't control the rise of the KYC on many websites but luckily there are still sites who don't comply with it. We can always choose to use those sites.

As long as the website is legit and you are willing to hand out your KYC, then you shall not worry because they won't likely leak you data to other companies that they know. It will be better if they store the KYC away from their server so that once their site got hacked, the users KYC's are still safe. Along with that is they must tighten their security so that hackers won't have the chance to access them.

That's what sites that ask their customers to do KYC have to do by being able to keep their customer's confidential identity data in a different place from their site so that if something happens to their site, the data is still safe there. And the big sites have implemented it, but maybe not all of them are aware of it, so we still hear news about hacking a site. And it should be if the exchange site can continue to improve its service to its customers so that the site can gain the trust of its customers. And its customers also rest easy as long as they use the exchange site for trading and other things.

[Tony116]

I am used to with KYC on all cryptocurrencies exchange market and actually as arbitrage need higher withdrawing in daily day need to break KYC process, but for trader or user not agree with KYC have alternative and option with trading on exchange without have to pass KYC like Kucoin, MEXC and Hotbit.

But have little disadvantage with account without process KYC get limit withdrawing under 2 Bitcoin in daily day and if want withdraw higher amount need to upgrade by KYC processing. Binance have been adopted must KYC and not available withdrawing or trading if not pass KYC or upload document needed.

It's sad that people are so easily ready to give up their freedom in exchange for convenience. If a person chooses food between freedom and food, then he will lose everything over time, including food. It's a pity that many do not think about it.

It can be said that the purpose of everyone participating in this market is to seek profit, to seek financial freedom, not to seek privacy, so they will not be too concerned about their privacy. Your privacy is also useless if you are a poor person, our society is a pragmatic society, and we need to accept the truth.
Another thing is, if you are not using CEX, converting to fiat will be very difficult. Honestly: I really don't believe in P2P trading, I can't find a trusted person in my local area to do P2P transactions.

[o_e_l_e_o]

Another thing is, if you are not using CEX, converting to fiat will be very difficult.

I have never used a CEX and I trade between fiat and bitcoin regularly. It is not difficult at all. It is certainly far easier than having a centralized exchange freeze my account, seize my coins, and leak my identity on the dark web.

Honestly: I really don't believe in P2P trading, I can't find a trusted person in my local area to do P2P transactions.

Where have you looked? Try some of the exchanges listed here: https://kycnot.me/. In particular, Bisq, AgoraDesk, and RoboSats are the best at the present time. And if there isn't someone in your local area, you can still trade via bank transfer with people further afield.

[so98nn]

On one hand, KYC can help prevent fraud, money laundering, and other illegal activities.

Technically, yes. But in the grand scheme of things, KYC does more harm than good. We couldn't count now how much platforms(inside and outside the cryptocurrency space) have been hacked and with their databases breached.

Yup, having KYC always has been harm actually. With more and more projects coming to life they will start asking for KYC as mandatory step for user account verification. This is not just limited to exchangers anymore but also to the new alt projects with high throughput.

It’s literally getting equal to having a bank account opening process and submitting everything to the world. One thing is sure, you can’t trust exchanger and how big or secure they claim themselves it won’t matter. There always be someone smarter to hack into it.

[milewilda]

On one hand, KYC can help prevent fraud, money laundering, and other illegal activities.

Technically, yes. But in the grand scheme of things, KYC does more harm than good. We couldn't count now how much platforms(inside and outside the cryptocurrency space) have been hacked and with their databases breached.

Yup, having KYC always has been harm actually. With more and more projects coming to life they will start asking for KYC as mandatory step for user account verification. This is not just limited to exchangers anymore but also to the new alt projects with high throughput.

It’s literally getting equal to having a bank account opening process and submitting everything to the world. One thing is sure, you can’t trust exchanger and how big or secure they claim themselves it won’t matter. There always be someone smarter to hack into it.

Might be that harmful but in order to be able to benefit out on services that could bring some convenience and accessibility then you would really be needing to sacrifice your identity and this is why its a matter of
choice which some doesnt really care on sending out their ID or documents as long they are able to benefit out on such usefulness or convenience.It is really just that there are really that people who are
really that mindful about their privacy.This is why its a matter of choice whether you do make use of them and sacrifice it out or would really be skipping out just because you dont
really like it.

[o_e_l_e_o]

This is not just limited to exchangers anymore but also to the new alt projects with high throughput.

If you are a criminal looking to launder some money, then this must surely be an attractive way to do it. Copy the code from some existing shitcoin. Launch a bounty campaign across here, Reddit, Twitter, Facebook, YouTube, etc., paying in your newly made up shitcoin. Require everyone to first complete KYC to receive payment in your newly made up shitcoin. End result: Hundreds of people submitting their full identities and KYC documents directly to you, and you didn't have to spend a single cent or sat.

Anyone who sends their KYC documents to an altcoin is just asking to have their identity stolen.

Might be that harmful but in order to be able to benefit out on services that could bring some convenience and accessibility then you would really be needing to sacrifice your identity

Let's be honest here - it isn't convenience or accessibility which drives people to sacrifice their privacy; it's greed. They want to get a piece of the obviously unsustainable 20% APY that such centralized platforms were promising before they went bust. They want to get in on the next pump and dump scam. They want to be airdropped the next shitcoin scam. They want to get their 10 shittokens reward for completing advanced verification. And so on.

[Potato Chips]

Honestly: I really don't believe in P2P trading, I can't find a trusted person in my local area to do P2P transactions.

Where have you looked? Try some of the exchanges listed here: https://kycnot.me/. In particular, Bisq, AgoraDesk, and RoboSats are the best at the present time. And if there isn't someone in your local area, you can still trade via bank transfer with people further afield.

If ever the known no-kyc p2p exchanges returned no results. I say try hitting some social networking platforms as well and see if it’s possible to invite someone over. A lot of people actually trade on discord, facebook, telegram, etc. without or a with a filmsy “escrow”. These people most likely don’t know there are better alternatives to do p2p that’s why they settle for such…

[OcTradism]

If ever the known no-kyc p2p exchanges returned no results. I say try hitting some social networking platforms as well and see if it’s possible to invite someone over. A lot of people actually trade on discord, facebook, telegram, etc. without or a with a filmsy “escrow”. These people most likely don’t know there are better alternatives to do p2p that’s why they settle for such…

I don't think trading on any platform (Discord, Telegram, etc.) without Escrow is safely to do. Scammers mostly watch over those channels to find such trades and scam inexperienced traders. So Escrow service provided by highly trusted person is very important to secure such trades for both buyer and seller.

Consider to trade with trusted trade partners and if you want to use Escrow service to make such trades more safely, only use Escrow from very trusted provider/ person.

In future, I believe there will be less platforms with non-KYC services.

[o_e_l_e_o]

A lot of people actually trade on discord, facebook, telegram, etc. without or a with a filmsy “escrow”.

I don't have any social media accounts, but from the number of reports on here, Reddit, and Twitter of people who have been scammed on social media, I would steer well away from using them to trade unless either you already know and trust the person you are trading with, or you are using a mutually agreed on reputable escrow. There have been plenty of such reports of scammers suggesting an escrow, and the escrow was working with the scammer all along. Pick one of the reputable escrows from this forum.

There is also the currency exchange board on this forum.

In future, I believe there will be less platforms with non-KYC services.

This actually doesn't bother me too much. P2P isn't going away; in fact, its volume is growing as centralized exchanges become ever more draconian. More volume on fewer exchanges means a better experience across those exchanges. If everyone did away with the semi-decentralized exchanges which operate via centralized websites and just moved the pinnacle solution - Bisq - then the volume on there would be amazing and would solve everyone's issues. We only need one decentralized coin, although there are plenty of lesser imitations. We would do just fine with just the one truly decentralized exchange.