Trade like the James Bond of crypto without leaving a breadcrumb trail for hackers.
Updated Oct 21, 2022
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KYC, AML, GDPR. FML, am I right?
Here you are, just buying the dip like your favorite crypto influencer recommended (even though it wasn't financial advice). But all these cartoon-sounding crypto exchanges like Kraken, Gemini, and CoinEgg ask for your private information.
What gives? Crypto was supposed to be for the people, but we just traded in old gatekeepers for new ones, it seems. And with all the exchange hacks making headlines, who says that your KYC data won’t end up on the darknet?
These, my friends, are the issues we’re going to be addressing down below. And stick until the very end for my list of the best no-KYC crypto exchanges you can use today.
So let’s get you checked in. No photo ID required.
KYC and AML are short for Know Your Customer and Anti-Money Laundering. In short, they’re a set of regulations that require financial service providers, like crypto exchanges, to authenticate the legal identities of their customers. The idea is that these procedures help to counteract money laundering, financial fraud, and terrorist financing.
Crypto exchanges that don’t comply with KYC risk being shut down or heavily fined. A few horror stories of the latter:
In traditional finance, KYC isn’t all that big a deal. But in the crypto industry, KYC compliance is the subject of heated debate. On the one hand, KYC and AML are meant to prevent financial crime. But on the other hand, KYC crypto exchanges violate the privacy ideals that digital currency was built on.
Like every rapper has said at one point or another in their lyrics, "There’s levels to this shit." And in the world of KYC verification, these are the levels that you have to go through to trade crypto.
The first and simplest level, the crypto exchange collects your personal details through means such as your national ID, facial verification, phone number, and utility bills. Identity verification is the main difference between crypto exchanges and wallets is that anyone can make them without identification.
At this level, the crypto exchange does a background check to make sure you’re not part of any shady financial dealings. The purpose of this is to protect the crypto exchange from liability in case authorities ask them to hand over internal records.
Finally, the crypto exchange keeps an eye on all your transactions going forward and flags any suspicious activity. In other words, this level never ends. An example of suspicious activity could be receiving large wire transfers from off-shore bank accounts.
And if the exchange deems you to be high-risk, then they could simply freeze your account—cryptocurrencies, fiat money, and all. This is one of the main reasons crypto experts recommend using an external wallet.
Since cryptocurrency isn’t regulated globally, the amount of information each customer has to provide to get verified will differ by country and state. I’d hate to break it to you, though, but if you’re masterminding your escape to a crypto-friendly country with little regulation, it might not be worth it in the long term.
Financial institutions like the Financial Stability Board (FSB), the International Monetary Fund (IMF), and others are working together on a global regulatory framework for cryptocurrency. The adoption of the General Data Protection Regulation (GDPR) in EU countries gives us a glimpse of what this could end up looking like.
But don’t let the FUD get you down. There are still plenty of reliable no KYC cryptocurrency exchanges out there with low trading fees and features like margin trading and bitcoin futures trading. Let’s look at the two main types of exchanges you'll be dealing with.
The crypto exchange sector is split into two large camps—centralized exchanges and decentralized exchanges. So that begs the question: which one should you use? Let’s evaluate both, starting with the big dogs who did more than $14 trillion in trading volume last year.
The concept of “centralization” refers to a system that has a single point of failure. With a centralized crypto exchange (CEX), users have to trust the company to:
Centralized exchanges have their risks though. As the famous adage goes: “Not your keys, not your coins.” So, if your KYC raises red flags, you can say adios to your crypto. On the plus side, some centralized exchanges allow users to trade without KYC, albeit with small deposit and withdrawal limits and limited margin trading and futures trading features.
Aside from centralized exchanges that allow you to trade your fiat for crypto, some CEXs only support crypto-to-crypto trading. And since cryptocurrencies don’t belong to any nation, these crypto-to-crypto centralized exchanges are less likely to employ KYC as their fiat-to-crypto counterparts.
Finally, some exchanges also avoid implementing KYC altogether by residing in countries with little to no crypto regulations, like Seychelles. All the best no KYC crypto exchanges will fall into this camp, but let’s travel to the other side.
With a decentralized crypto exchange (DEX), users cut out the middleman. DEXs are simply platforms (oftentimes open source) that enable users to trade peer-to-peer by utilizing crypto deposits in smart contracts.
However, since there’s no central authority to ensure legal compliance, DEXs only support crypto-to-crypto trading. This means you can't use fiat directly on DEXs without going through an onramp, but your next best option is to trade using stablecoins.
Now that you’re up to speed on crypto KYC, let’s weigh the pros and cons of using the best no KYC crypto exchanges to trade crypto.
While these procedures are meant to prevent financial crime, there are legitimate reasons for not wanting to undergo verification at a KYC crypto exchange.
Privacy
One of the main selling points of cryptocurrency is anonymity. Well, at least that was part of Satoshi Nakamoto’s vision for Bitcoin. But ever since cryptocurrency became linked to criminal activities—like purchasing drugs and weapons on the dark web—regulators weren't letting that slide.
Once you purchase cryptocurrency through a KYC crypto exchange, you attach your personal identity to a set of crypto addresses. This data can, in turn, be used to:
But even if crypto enthusiasts were okay with using a KYC crypto exchange, there’s still the issue of trust. Sensitive customer data stored on KYC crypto exchange servers have been leaked too many times to count. Even a KYC crypto exchange the size of Binance got hacked in 2019, where 10,000+ personal photos were stolen for ransom.
Accessibility
Depending on where you live, KYC can also act as a barrier to entry into the crypto market. Countries like China, Egypt, Morocco, and Algeria have all banned cryptocurrencies. There’s also a lot of regulatory uncertainty around crypto in the U.S., with New York having some of the strictest requirements.
This is, again, diametrically opposed to the ideals of cryptocurrency—which is meant to be borderless and accessible to all, particularly in case of a state collapse or rampant inflation.
Finding reliable non-KYC crypto exchanges is no easy task. A lot of the big-name exchanges that used to not require KYC, like Bybit, Changelly, and Poloniex, have succumbed to regulatory pressure.
So let that be a lesson: Just because an exchange is non-KYC today doesn't mean it won't require identity verification tomorrow. In either case, below you'll find the best no-KYC crypto exchange for you.
LocalCryptos
To trade on custodial crypto exchanges, you must send your cryptocurrency to a wallet they control. A non-custodial exchange, on the other hand, is one where you control the wallet.
LocalCryptos is a non-custodial, non-KYC platform that combines the best of both worlds—the user-friendliness of a centralized exchange and the peer-to-peer trading of a decentralized exchange.
Huobi
Huobi Global is the 6th largest centralized exchange as of this writing. And while it does require KYC for complete functionality, non-verified users in select countries can trade with up to $1,000 in fiat.
Uniswap
Uniswap isn’t just the most popular DEX on Ethereum, it’s also the largest DEX in terms of transaction volume ($2 billion+ daily). So if you’re looking to trade ETH or ERC20 tokens, this is your spot.
KuCoin
KuCoin is the go-to crypto exchange for trading small-cap altcoins. They also have partial KYC so that traders can buy and sell without verification up to a limit. That limit is 1 BTC every 24 hours, which is definitely at the higher end of non-KYC limits.
PancakeSwap
If Ethereum’s gas fees are too rich for your blood, PancakeSwap on the Binance Smart Chain is a solid low-cost choice. It's a decentralized exchange, so you can access it using a DeFi wallet that doesn't require you to reveal your identity.