March 28, 2024

What cryptocurrency exchanges do not require KYC verification?

What cryptocurrency exchanges do not require KYC verification?

For the second year, the controversy surrounding the Fifth Directive, created with the support of the FATF, has not subsided in the cryptocurrency market. Sheobliges users of digital currencies to go through a personal identification procedure. Let's figure out which exchanges reliably store user data.

A recent story with WhatsApp has raised anothera wave of disputes about the protection of personal information that users transmit to companies when going through the KYC procedure. For cryptocurrency traders, this is a mandatory step, without which they will not start working on a cryptocurrency exchange.

According to the international organization againstAnti-Money Laundering Task Force (FATF), these measures will help prevent financial crimes and prevent the sponsorship of terrorism. However, by providing information about yourself to crypto platforms, the user risks his own money, because in the event of a data leak or theft, fraudsters will have copies of their passport, a key to a crypto wallet, and much more.

Why do exchanges “know their customer”?

What cryptocurrency exchanges do not require KYC verification?

</p>

Just a few years ago the majoritycryptocurrency exchanges were completely anonymous and did not require users to undergo the KYC (know your customer) procedure. At the same time, a huge number of cases of money laundering through cryptocurrencies were registered on the market, and the black market was also actively developing, where using digital coins one could buy drugs, computer viruses, smuggled jewelry, illegal drugs and much more.

According to Chainalysis research, in 2020 inIn the darknet space, about 1 million bitcoins were circulating, of which 300 thousand BTC were coins that were stolen from user wallets or crypto exchanges. For comparison, in 2017 this figure was 22% higher. The decline in the darknet market is largely due to the implementation of the KYC procedure, which became an integral part of the Fifth Anti-Money Laundering Directive (5AMLD), adopted worldwide on January 10, 2020.

It has become much more difficult for crypto fraudsters to withdrawfunds from exchanges or launder money using cryptocurrency, since the trading platform had the user’s personal data, including a copy of the passport or identification documents. If suspicions arose, supervisory and regulatory authorities could easily identify a potential criminal and bring them to justice.

The introduction of the KYC procedure was not initiallywas welcomed neither by the users themselves nor by crypto exchanges, who argued that identification was contrary to the nature of the blockchain - anonymity. Constant leaks of customer data add fuel to the fire. So, in December 2019, the Poloniex exchange announced a large-scale leak of users’ personal information. And at the end of 2020, hackers stole more than 1 million user email addresses from Ledger.

How to go through the KYC procedure and is it mandatory?

In fact, there is nothing complicated in the KYC procedure, and you can go through it in just a few minutes, especially at the initial stages, if you are not going to withdraw large amounts from the site.

Despite the fact that each exchange has its own requirements, in general, the procedure is similar and fits into several standard steps.

  1. To begin with, most likely, you will have to confirm that the user is over 18 years old, otherwise crypto trading will be completely banned.
  2. Then you need to agree to the Privacy Policy and Terms of Use.
  3. Select the country of registration and residence, as well as upload a copy of your passport or other identity document.
  4. Then you need to take a photo from your phone or computer camera. Sometimes exchanges require you to take a picture of yourself along with your passport.
  5. And finally, agree to the processing of the data and send it for review. Verification completed.

Let's consider the requirements of cryptocurrency exchanges for users and also analyze where and how trading platforms store information.

Binance (can be used without going through KYC)

What cryptocurrency exchanges do not require KYC verification?

</p>

The largest cryptocurrency exchange Binance uses the KYC procedurepartially. In factBinance allows you to trade cryptocurrency, as well as make deposits and withdrawals without verification..

For example, traders on a spot market canwithdraw up to 2 ВТС ($ 70,000 at the current exchange rate) per day without going through identification. However, these rules do not apply to US citizens and residents.

Official website of the exchange https://www.binance.com

If you need to withdraw more than 2 BTC ($ 70,000 at the current exchange rate) per day, you will need to go through the KYC procedure and provide the following data:

  • full name and surname;
  • indicate nationality;
  • code of the country;
  • gender;
  • signature;
  • email address;
  • utility bills;
  • home address;
  • password;

To transfer and store your personal informationEncryption technologies such as PCI scanning and multi-layer secure socket encryption can be used. Binance also reports that access to storage facilities and buildings where servers with user data are installed is limited to a limited number of people in order to minimize physical contact with data storage devices.

OKEX

What cryptocurrency exchanges do not require KYC verification?

</p>

OKEX cryptocurrency exchange with daily volumetrading at $11.5 million, made headlines after the arrest of one of the platform’s founders. Let us remind you that the exchange froze the withdrawal of funds after OKEx founder Star Xu was arrested by law enforcement agencies. Note that Xu had access to the private keys of the wallets in which user funds were stored.

After the incident, the exchange intends not only to docopies of private keys, but also tighten the requirements for using the platform. In accordance with the requirements of the General Data Protection Regulation (GDPR) and the Data Protection Act, the exchange collects and stores the following list of data:

  • E-mail address
  • cell phone number
  • Full legal name (including former name and local language names)
  • Nationality
  • Passport number or any government-issued identification number.
  • Date of birth ("DOB")
  • Proof of identity (such as a passport, driver's license, or government issued ID)
  • Residence address
  • Proof of residence
  • Additional personal information or documentation at the discretion of our compliance team

The company also talked about information protection methods.

“We are taking various measures to ensureinformation security, including encryption of OKEx messages using SSL, two-factor authentication for all sessions, and others. Company employees have limited access to your personal data ", - said in the document.

Bitfinex

What cryptocurrency exchanges do not require KYC verification?

</p>

Bitfinex is among the top 5 exchanges in terms of trading volume andregistered in the British and Virgin Islands. The site is confidently included not only in the list of popular, but also in the list of "best detectives of the year", as it collects a huge array of customer data from various sources.

According to the "Privacy Policy",The crypto exchange stores data such as personal data specified during registration, including the data provided for by the KYC procedure, transaction history, history of payments and purchases of the LEO token, correspondence with support and other exchange services, any messages created in Bitfinex Pulse.

In addition, the exchange collects IP addresses, type andbrowser version, time zones, type of operating system and modules, date and time of the platform visit, all user actions, including page views, button clicks, mouse movements on the monitor screen, and much more.

At the same time, the company does not explain how exactlyhow user data is protected from hacking and where it is stored. The developers only dryly explained that a limited number of people will have access to information.

“However, no information system canbe 100% protected. Therefore, we cannot guarantee the absolute security of your information. In addition, we are not responsible for the security of the information you transmit to us over networks that we do not control, including the Internet and wireless networks. ", - explained in the "Privacy Policy".

Poloniex

What cryptocurrency exchanges do not require KYC verification?

</p>

After a massive data breach, the founders of Poloniex promised to improve the data protection system to minimize the likelihood of hacker attacks.

The updated version of the PolicyPrivacy ”states that the exchange collects and stores information such as the user's first and last name, email and mailing address, date of birth, government-issued ID, tax ID, identification information, photos, company name and password. In addition, the exchange may collect and store information about convictions, sanctions against a specific user, and more.

User information is stored on servers,located in the USA, and only a limited number of people have access to them. At the same time, little has been said about methods of computer information protection. The document states that the exchange uses encryption technology. No other details could be found.

findings

The KYC procedure requires the provision of personaldata. Users of crypto exchanges need to take this as a fact and choose trading platforms that are able to minimize the amount of information collected and guarantee the protection of personal information in accordance with international and European standards.

What to look for when choosing a platform:

  • The amount of data required.
  • Information storage and protection technologies.
  • Liability of the exchange to users in the event of a leak.
  • Exchange hacking history.

What cryptocurrency exchanges do not require KYC verification?

</p>

5
/
5
(
1

voice
)