Today, it is possible to buy Bitcoin and other digital currencies in most reputable exchanges only by authenticating the identity of the buyer.
Because many people have tried to use these cryptocurrencies for money laundering and fraud over the years by using an exchange without authentication. This has led to the use of authentication by reputable exchanges to comply with global anti-money laundering laws.
In this article, we will explain why authentication is necessary to buy Bitcoin and other cryptocurrencies and introduce some ways to buy digital currency without authentication. Don’t use ways you don’t really need.
In this article we will discover
- What is authentication or KYC?
- The reasons for the necessity of authentication in most exchanges
- Methods of buying digital currency without kyc
- Buying from exchanges without KYC
- Purchase in person from the Bitcoin store
- Buying from a Bitcoin ATM
- The risk of buying cryptocurrency without KYC
- Why is authentication mandatory in most exchanges?
- Frequently Asked Questions
What is authentication or KYC?
If you have bought digital currency, bitcoin or another cryptocurrency from a reputable exchange, you must have gone through the authentication process. These steps are usually simple and quick. The exchange will ask you for your full name, address and phone number. Some exchanges require you to take a selfie of yourself holding your documents.
Reputable financial organizations in the world use a customer identification system called KYC or Know Your Customer.
In this system, every financial group that has a large and significant market knows its users in different ways. With this, financial organizations can follow up on small and large financial violations, which is not possible in an exchange without authentication.
It is not possible to buy digital currencies without going through authentication procedures in these exchanges or it has a limited withdrawal and deposit limit.
The reasons for the necessity of authentication in most exchanges
Identifying a user’s identity helps a digital currency exchange or any other trusted group control two important factors.
First, the illegal use of digital currencies, and second, solving possible problems during transactions. KYC is required for tax audits in some countries where digital assets are taxed.
Therefore, some users turn to using an exchange without authentication to bypass these tax laws.
Prevent illegal uses
As the first digital currency, Bitcoin created a decentralized financial system. In the sense that no one controls it and certain individuals and governments do not have influence in it.
Satoshi Nakamoto wanted this decentralization to both make financial relations fairer and limit the power of centers such as banks in financial transactions. In fact, decentralization is one of the advantages of most digital currencies, but this feature has caused various abuses of this type of asset.
This abuse could have caused responsible and law-abiding people to be deprived of digital currencies. Because governments wanted to remove and declare cryptocurrencies illegal. By using the KYC process, exchanges were able to control this situation and keep the Bitcoin network safe for everyone.
Reducing tax evasion
In countries like the US, where Bitcoin and other digital currencies are taxed, many people were reluctant to declare their assets and turned to using an exchange without authentication. In 2017, when the price of Bitcoin increased significantly, only 892 people reported their Coinbase account information to the US IRS.
Authentication helps governments to track people’s cryptocurrency income tax.
Methods of buying digital currency without kyc
Despite all the aforementioned risks and legal requirements, there are still users who, for personal reasons, want to buy digital currency without going through the authentication process.
As mentioned, most cryptocurrencies operate in a decentralized manner, so it is still possible to buy them without KYC.
Buying from exchanges without KYC
Various reputable exchanges in the world provide the possibility of buying and selling digital currency without KYC. These exchanges are of two types:
- Exchanges that do not require kyc at all for membership.
- Exchanges that do not require kyc up to a certain purchase limit.
Of course, these rules may change in the future, and an exchange that does not consider KYC mandatory will make this process mandatory after a while.
For example, until a few years ago, in a large exchange like Binance, depositing and withdrawing up to 2 bitcoins per day did not require authentication. But according to an announcement, the authentication process was required in this exchange.
There are a few large exchanges without authentication that do not require providing identity information for membership and only an email is sufficient.
You can find the names of five exchanges without the need for KYC in the list below:
LBank Exchange
LBank Exchange is a digital currency buying and selling platform that was established and launched in 2015. The head office of this company is located in Indonesia and provides services to almost 200 countries of the world.
The important feature of this exchange is the presence of spot, futures and ETF trading markets. Also, LBank exchange supports more than 450 digital currencies such as Bitcoin, Ethereum, Cardano, etc.
This digital currency exchange has a simple user interface and traders can easily access advanced trading tools, charts and graphs. In addition to the website, users can also use Android and IOS applications.
From 2015 to date, LBank has gained almost 5 million users and has become one of the most popular platforms today.
Although this exchange does not require KYC, it has set a ceiling for depositing and withdrawing cryptocurrency without KYC, which is as follows.
- Sign up by email: 0.5 Bitcoin
- Registration with email and verification of mobile number: 1.5 bitcoins
- Sign up with email and mobile number and use 2FA to increase security: 15 bitcoins
- Complete all the steps above plus register your own password for Assets: 25 Bitcoins
CoinLocally exchange
CoinLocally Exchange is a newly established cryptocurrency trading platform launched in 2022. According to the information provided on the website of this exchange, the head office of this platform is located in Armenia.
By completing the KYC procedures in this exchange, you will have unlimited deposit and withdrawal capabilities.
If the KYC procedures are not completed, the deposit and withdrawal limits will be as follows.
- Email registration: no limit for deposit and daily limit of 1.5 bitcoins for withdrawal
- Registration and verification of mobile number: no limit for deposit and daily limit of 6 bitcoins for withdrawal
- Registration and authentication with mobile phone and identification documents: No KYC for deposit and daily limit of 16 bitcoins for withdrawal
Paybis exchange
Paybis exchange has been operating since 2014 and has considered several payment methods for users, which is known as an exchange without kyc.
The account verification process in this exchange takes about 5 minutes. This exchange allows the user to buy and sell without the need for identity information.
This exchange has also canceled transactions with Perfect Money. Because Perfect Money allowed some users to buy and sell digital currency, which is against international money laundering laws.
The restrictions applied to accounts without KYC are as follows:
- Registration by email: no deposit limit and 10 thousand dollars annual withdrawal limit
- Registration with email and identification documents: no deposit limit and $20,000 daily withdrawal limit and $50,000 monthly withdrawal limit
BISQ exchange
BISQ exchange is a decentralized exchange where transactions are carried out in an open space and on a contractual basis. It means that two people make a contract and fulfill it
If there is a dispute, the two sides of the transaction must resolve it, and if no solution is found, the money and cryptocurrency are donated to the exchange.
The working method of this platform is not so easy and safe. In fact, there are many security intrusions in this method and the news published by BISQ is not very favorable at the moment.
However, the popularity of this exchange is increasing day by day, because users do not need to register to make transactions in this exchange.
Due to the lack of registration in this exchange and its decentralized nature, it is not possible to deposit and withdraw. Therefore, it does not contain any restrictions.
Bybit exchange
Bybit exchange is an unauthenticated and well-known digital currency exchange. In this exchange, it is possible to buy and sell unlimited digital currencies without KYC.
You can buy and sell Bitcoin, Ethereum, Ripple, IAS and Tether in this exchange. Bybit exchange has already grown very well and can support up to 100,000 transactions per second.
This exchange, like other digital currency trading platforms, has imposed restrictions on users who operate in this exchange without authentication.
Users without KYC can make unlimited deposits, but are subject to the following restrictions for withdrawals.
- Register by email: Withdraw $20,000 daily and $100,000 monthly
- Register by email and mobile: daily withdrawal of 1 million dollars
- Registration with email, mobile phone and identification documents: daily withdrawal of two million dollars
Purchase in person from the Bitcoin store
There is a store for buying and selling Bitcoin and 11 other cryptocurrencies in Croatia. In this store, which is the first face-to-face Bitcoin store in the world, you can buy up to 2000 euros without KYC.
The employees of this store love cryptocurrencies and try to introduce people to cryptocurrencies.
Buying from a Bitcoin ATM
About 62 countries in the world have bitcoin ATMs. A Bitcoin ATM is a device similar to a regular ATM, except that it can be used to buy cryptocurrency.
Although the digital currency ATM does not ask you for identity information, it receives the information stored in your card. Many ATMs also have a purchase limit, and if you want to buy a significant amount of Bitcoin, they will ask you for simple identification information, such as a phone number.
It’s good to know that the privacy that a Bitcoin ATM gives you doesn’t come for free. The fee for working with these devices is between 7 and 10 percent of the total purchase amount, which is much higher than the exchange without authentication.
The risk of buying cryptocurrency without KYC
Buying Bitcoin and other cryptocurrencies without knowing the other party has its own risks, even in two-person transactions.
But you can reduce the risk of this transaction by doing different things. On the other hand, buying digital currency in an exchange without authentication also makes you face various crimes, which include the following:
Falling into a phishing trap
When a site allows you to buy digital currency without KYC, it provides a way for phishers to spend money stolen from your bank account. He can buy crypto without leaving a trace and turn it into cash in a simple way.
Alternatively, Phisher may send you a checkout link to pay for cryptocurrency purchases. Entering information on an untrusted payment page can give away all of your account information.
Falling into a phishing trap is one of the most important risks of operating an exchange without KYC.
Rental account owners (money laundering)
In the article Why it is illegal to rent a user account in a digital currency exchange, we have explained in detail about the owners of rented accounts and the risk of working with them.
Working with people who want to rent your account so that they don’t have to operate the site themselves and do KYC should always be a red flag for you. These people use other people’s accounts with the purpose of money laundering and losing the money trail.
The account holder must understand that he is responsible for all transactions that are made with his account. So, if the origin of the money is from an illegal place, the owner of the account must be accountable to the law.
Internet Fraud
Let’s say you come across an ad titled “Buy Bitcoin without KYC”. In this case, you think that it is easy and fast and you don’t have to complete the complicated KYC process anymore.
But you may simply deposit cryptocurrency money and your counterparty will not send you any cryptocurrency. Many internet fraudsters have been able to defraud users of large sums of money with this.
Privacy protection
In fact, no one can restrict digital currency users from doing anything, and new ways to protect privacy will always be introduced in the market. The following methods will increase your privacy in the cryptocurrency space.
- Using different wallet addresses to perform transactions
- Using hardware wallets and multiple wallets
- Using the Mix Bitcoin (or currencies like Monero) transaction service
- Using a VPN
- Trading altcoins with higher privacy (like Dash)
Authentication against Satoshi Nakamoto’s will
Satoshi Nakamoto invented Bitcoin so that different people can trade without knowing each other. In addition, Nakamoto wanted to cut the hands of governments from people’s financial relationships.
So KYC is actually against the will of the creator of Bitcoin and violates the philosophy behind the creation of digital currencies.
However, Bitcoin is decentralized and no one can decide its fate yet. Authentication in the exchange has not completely eliminated the possibility of anonymity of the owner of Bitcoin and other cryptocurrencies.
Any person can refuse to declare their assets by having a private wallet (digital currency wallet) and keeping cryptocurrencies in it. Many Bitcoin fans are currently buying this coin through an exchange without authentication or real people.
Why is authentication mandatory in most exchanges?
User privacy was Satoshi Nakamoto’s ideal for creating Bitcoin. However, the conditions of the digital currency market have changed a lot since 2009 and the emergence of Bitcoin, and many exchanges require users to KYC in order to trade and sell on their platform.
However, users can have an easier activity on the network by following national and international agreements.
The reason for requiring users to complete the KYC process is to prevent abuse, cybercrime, money laundering, and more security for users, which is not respected in an exchange without authentication, and users’ assets are at risk.
In this article, we have explored the various aspects of buying Bitcoin and other digital currencies without authentication. We have shown why authentication is necessary and why it helps users’ security.
Frequently Asked Questions
Why do different people prefer to buy cryptocurrency without KYC?
Bitcoin and many digital currencies were created from the beginning with the goal of enabling anonymous transactions.
Many digital currency users care about their privacy and assets and do not want this information to be in the hands of the government and the bank.
Apart from all the aspects we said about the possibility of internet frauds by buying digital currency without KYC, Ww believe that privacy remains a value for crypto users.
However, each user should use an unauthenticated exchange prioritizing transaction security or privacy.
What are the disadvantages of buying digital currency with authentication?
Usually, KYC in exchanges is time-consuming. This is despite the fact that buying and selling digital currencies in the world is 24 hours a day and every moment can be a good deal opportunity.
On the other hand, it is not pleasant for different users to provide their identity information to an exchange that they do not know much about its managers.
Why is it hard to buy digital currency without authentication?
First, many cryptocurrencies are not completely anonymous. In fact, the identity of the owner of the public key of a transaction is anonymous, but the transactions are all recorded in the blockchain in full detail.
There are several ways to connect a public key to a person and reveal the identity of the owner of the transaction.
In addition, it is the international laws that have provided order in today’s world. Buying and selling crypto without authentication in large exchanges and with large amounts could make a big change in the economy of the digital currency market and even the world.
This is almost obligatory to maintain the existing order.
Is my authentication information in the exchanges safe?
Yes. Most reputable digital currency exchanges use your identity information only when a suspicious transaction has taken place through your account.
As long as you work honestly in the exchange, your information will not be used in any other way.