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

[EXMON]

Hey everyone, I wanted to start a discussion around the topic of anonymity and KYC (know your customer) requirements in cryptocurrency exchanges. As we all know, there are exchanges that require extensive KYC verification, while others operate with little to no verification process.

On one hand, KYC can help prevent fraud, money laundering, and other illegal activities. It can also provide a sense of security and transparency for users who want to know who they're trading with and ensure that their funds are safe.

However, KYC can also compromise anonymity and privacy, which are often highly valued by cryptocurrency users. Some argue that the need for KYC goes against the decentralized and borderless nature of cryptocurrencies, and can even put users at risk of data breaches and identity theft.

So, what are your thoughts on exchanges with and without KYC? Do you prefer exchanges with strict KYC requirements, or do you value anonymity and privacy more and prefer to use exchanges with little to no verification process? What are the disadvantages and advantages of each approach? And what measures do you take to ensure your anonymity when exchanging cryptocurrencies?

Let's have an open and respectful discussion around this topic and hear everyone's perspectives. Looking forward to your input!


List of KYC data breaches.

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[mk4]

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.

[Charles-Tim]

You make me remember this:

Why KYC is extremely dangerous – and useless

Just that traders prefer centralized exchanges, but recommended using the amount you can lose to trade.

[EXMON]

You make me remember this:

Why KYC is extremely dangerous – and useless

Just that traders prefer centralized exchanges, but recommended using the amount you can lose to trade.

Thank you for your attention to this topic. You are absolutely right.

The state has always sought to control its citizens. Under the guise of combating terrorism and money laundering, the state aims to regulate the financial activities of everyone. However, the state's desire to control its citizens should not come at the expense of people's privacy and security.

Cryptocurrencies like bitcoin have been accused of being a tool for criminals and terrorists to fund their activities. However, this argument is flawed. Criminals have always found ways to launder money, and they do not need cryptocurrencies to do so. In fact, the vast majority of criminal activity is still carried out using traditional banking systems. Additionally, corrupt officials themselves often launder their own money using traditional banking systems, as evidenced by documents published on Wikileaks.

[death69]

As a boss trader in the crypto game, I know that privacy and security are key when you're using exchanges. You feel me? While KYC requirements can keep the feds off your back, I think there are other ways to stay safe and keep your business on the DL.

One way is to use decentralized exchanges where you don't gotta give up all your deets just to trade. But let's be real, there's always a risk when you're doing things off the grid.

Another option is to use exchanges that have a tiered KYC system. That means you can choose how much verification you want to give. You can keep it low-key for small transactions, and then do the full shebang for the big bucks. That way, you can have some privacy while still keeping it secure.

At the end of the day, it's all about what you're comfortable with and how much risk you wanna take. Me? I like the tiered KYC system. And I ain't taking no chances - I use VPNs and anonymous email accounts like a boss. Ain't nobody gonna catch me slipping!

[Cryptomiles1]

You have to get something clearly about kyc on a centralized exchange, we are only doing it to have full access to the exchange but this doesn't mean your details are secured with them. Let just take it as you said already that "it's to prevent fraud and money laundering" yet they are being hacked those who are involved can't be tracked and trace, now tell me where do you think the hack is from?
Naturally this might comes from their staff or an insider who knows very well about the exchange.

Therefore, I don't like any platform which involves kyc and for trading it would be better of using p2p to trade in order to maintain anonymity and privacy.

[tbct_mt2]

KYC is a tool for governments to force centralized exchanges to collect personal identity data of customers. Those data later can be used for many purposes of exchanges and governments.

Tax for benefit of governments, data sales for benefit of centralized exchanges. Who are losers with KYC?

Customers are always losers if they submit their documents to verify their identities in KYC procedure. With big exchanges, their data can be hacked, leaked. With small exchanges especially scam exchanges, they can use KYC card as official reason to get customer data and sell it to get money.

[palle11]

Despite submitting details for KYC, there is yet the human factor of third party that ask for different levels of verification any time you are accessing such platform and that is against the spirit of cryptocurrency or decentralized operations. I prefer the spirit which blockchain is the technology for freedom and personal responsibility and not third party interference.

[EXMON]

KYC is a tool for governments to force centralized exchanges to collect personal identity data of customers. Those data later can be used for many purposes of exchanges and governments.

Tax for benefit of governments, data sales for benefit of centralized exchanges. Who are losers with KYC?

Customers are always losers if they submit their documents to verify their identities in KYC procedure. With big exchanges, their data can be hacked, leaked. With small exchanges especially scam exchanges, they can use KYC card as official reason to get customer data and sell it to get money.

Thank you for sharing your thoughts on KYC procedures.

That being said, I'm curious, what methods do you use to buy cryptocurrency? Are there any alternative methods or platforms that you prefer to use?

[Oshosondy]

That being said, I'm curious, what methods do you use to buy cryptocurrency? Are there any alternative methods or platforms that you prefer to use?

You can use a decentralized exchange like Bisq or hodlhodl. If your country people are on this forum, you can buy from them. If you do not want to use KYC, you can try your luck with instant exchanges like ChangeNow or Changelly, but the risk is that they are still centralized exchanges and if they see your coin as tainted, they will ask for KYC. People nowadays uses centralized exchanges which are trading platforms like Binance, Huobi and the likes, thinking it is easy to buy and sell coins, but they do not know the stress they go through when they were registering up to a fully verified account. For centralized exchanges that are trading platforms, you can try Kucoin or OKX, but they may ask for KYC at anytime too.

[bittraffic]

KYC offers convenience. You're not going to do any trouble in trading and cashing out which is the reason prefer to send thier documents to centralized exchanges. You can hardly find a platform that doesn't ask for KYC when you have to cash out too.

For Anonymity I guess you have the assurance that a wallet is not linked to your name. That is if you know exactly how to do it.

[Nrcewker]

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.

Database breaching is that main issue for which many people frown on this KYC verification thing. I mean we trust the exchanges with our data, but who will be blamed when the datas are leaked? Moreover Bitcoin are famous for it’s anonymity feature, and hence many people like to remain anonymous while dealing and interacting with Bitcoins or cryptos. I have also came across with such people, who don’t want to do KYC in any exchanges because, Bitcoins and Cryptos are not yet regulated in their nations. As a die hard Bitcoin lover, I would also prefer no KYC exchange over any centralised exchange.

[o_e_l_e_o]

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

I have yet to see any convincing evidence that this is the case, and I've definitely looked for it. It is absolutely trivial for a money launderer to buy the identities and documents of hundreds or even thousands of users on the dark web for only a few bucks, and to use their names and information to open fake accounts in order to launder money. KYC does not prevent laundering - all it does is frame innocent users who have had their data stolen. And given that literally every major centralized exchange has had one or more data breaches in the past, if you go around completing KYC, then chances are your documents will be leaked, stolen, or sold eventually.

Me? I like the tiered KYC system. And I ain't taking no chances - I use VPNs and anonymous email accounts like a boss. Ain't nobody gonna catch me slipping!

I am curious as to what you are trying to achieve by using a VPN and disposable email addresses when you are handing over your real name and information anyway.

That being said, I'm curious, what methods do you use to buy cryptocurrency? Are there any alternative methods or platforms that you prefer to use?

Bisq, Robosats, AgoraDesk. More here: https://kycnot.me/

[RealMalatesta]

what are your thoughts on exchanges with and without KYC? Do you prefer exchanges with strict KYC requirements, or do you value anonymity and privacy more and prefer to use exchanges with little to no verification process? What are the disadvantages and advantages of each approach? And what measures do you take to ensure your anonymity when exchanging cryptocurrencies?

My preferences are less important compared to my requirements. I mean even I prefer to stay away from all KYC things, I am still enforced to clear KYC because my needs are seeming like more important than my preference of protecting my identity. I was trading in bittrex exchange and they suddenly locked my account and when I contacted their support, I was directed to clear KYC. I got no other option except submitting my documents to enable withdrawing my coins.

If I was not into bounty campaigns and if I was not into the need of exchanging altcoins and tokens to BTC then probably I would have stayed complete anonymous by now but after cleared KYC in one exchange then I started get used to it. Still, I use old and reputed exchanges. I am not thinking on future problems as of now.

[jrrsparkles]

Hey everyone, I wanted to start a discussion around the topic of anonymity and KYC (know your customer) requirements in cryptocurrency exchanges. As we all know, there are exchanges that require extensive KYC verification, while others operate with little to no verification process.

On one hand, KYC can help prevent fraud, money laundering, and other illegal activities. It can also provide a sense of security and transparency for users who want to know who they're trading with and ensure that their funds are safe.

However, KYC can also compromise anonymity and privacy, which are often highly valued by cryptocurrency users. Some argue that the need for KYC goes against the decentralized and borderless nature of cryptocurrencies, and can even put users at risk of data breaches and identity theft.

So, what are your thoughts on exchanges with and without KYC? Do you prefer exchanges with strict KYC requirements, or do you value anonymity and privacy more and prefer to use exchanges with little to no verification process? What are the disadvantages and advantages of each approach? And what measures do you take to ensure your anonymity when exchanging cryptocurrencies?

Let's have an open and respectful discussion around this topic and hear everyone's perspectives. Looking forward to your input!

Regulations were forced by the government on the centralised exchanges depends on where that it origin from and we have our own choice which one we can prefer. As you said KYC has its pros and cons however if you are being a trader you should choose the centralized exchanges since the fees are low there whereas p2p exchanges and decentralized exchanges offers anonymity.

[crzy]

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.

This is the biggest downside of KYC, having your data leaked and that is beyond of your control and no one know where the data goes but for the security concern, its not that safe.

Some exchanges make KYC as mandatory so many have no choice but to comply though some site are still free from this, but if you want more features from CEX then filling out the KYC is a must.

[Husires]

Governments do not like that they do not have information about individuals, the source of their income, how they spend their money, and what is their share of each individual’s income. Therefore, they force the platforms to collect all this information. As for money laundering and others, they are just justifications, albeit logical in narrow limits.

The platforms are also trying to collect information on, commercialize or sell it and some are starting to use non-verification as a tool to get more logins.

So in short, everyone is racing to know the most information about you, and you must be smart to reduce the number of information collected about you.

[kamvreto]

Centralized exchange with mandatory and complete KYC, will be more dangerous. All your data will be owned by them so you no longer have privacy.
There are also exchanges that only apply KYC when making a certain amount of withdrawal so that without KYC it can still be used.
The pros and cons of implementing KYC will always be a concern. Those who are not concerned about privacy will do it, but those who are concerned about their privacy will not do the KYC. using Dex exchange would be better than doing p2p without needing to confirm KYC.

[GreatArkansas]

(....)
So, what are your thoughts on exchanges with and without KYC? Do you prefer exchanges with strict KYC requirements, or do you value anonymity and privacy more and prefer to use exchanges with little to no verification process? What are the disadvantages and advantages of each approach? And what measures do you take to ensure your anonymity when exchanging cryptocurrencies?

With the birth of decentralized exchanges (DEX) now, it's now very easy to trade without even signing up for some exchanges.
But there are some people who prefer using centralized exchanges and are not comfortable using decentralized exchanges.
About KYC, seems this is becoming normalized for some people, but to be honest, I really find it annoying and am afraid to trust my personal identities for some people, it's invading my private data.

[CryptocurencyKing]

On one hand, KYC can help prevent fraud, money laundering, and other illegal activities. It can also provide a sense of security and transparency for users who want to know who they're trading with and ensure that their funds are safe.

However, KYC can also compromise anonymity and privacy, which are often highly valued by cryptocurrency users. Some argue that the need for KYC goes against the decentralized and borderless nature of cryptocurrencies, and can even put users at risk of data breaches and identity theft.

Interesting facts you've raised here, it's nothing out of the ordinary but, your presentation is just precise and definitive on the matter. Good thing you have a hang on the issue but, its really no much issue.

Every system has got a downside and this isn't expected to be any much different. Its more of you having to size which is more to you at certain points. Why KYC has been such a troubling thing for most is because, we operate an online platform where the whom we do not know.

That's why it remains an issue of trust before using a platform and the options to KYC is always left with you.