There are global regulatory requirements which are enforced by many different countries.

These global regulations are influenced by standards such as The Financial Action Task Force (FATF) and the global Anti Money Laundering (AML).

Like other financial institutions such as banks and insurance companies, cryptocurrency exchanges and platforms also have to verify the identity of their customers and investors before they allow their users to access their services.

The reason it is getting more difficult to buy Bitcoin without KYC is essentially the push to regulate and control Bitcoin purchases in order to prevent the presence of bad actors.

There are service providers for KYC identification processes and it also allows one to see the legal background of the customer, including search warrants and the subjects of these search warrants; which makes it easy to identify ‘dangerous’ customers.

What Is KYC?

KYC means ‘Know Your Customer’. It is a verification process that allows an institution or financial service to confirm and verify the authenticity of their customer. The customer is required to submit a valid ID document such as a passport, or utility bills with their home address on them. These required documents will also vary from company to company as well as from country to country, depending on their regional laws. Some centralized exchanges will ask customers to write down the date of the application as well as some other information on a piece of paper and send a photo of themselves while holding this piece of paper. Also, the photo on the submitted ID will be compared with the instant video you send, and the results determine whether the KYC process will fail or not.

While it is necessary to avoid scams and frauds, some investors might not want to declare their identity and might prefer to make their purchases anonymously. Moreover, financial exchanges and blockchain companies are managed by people, and aside from the hackers who might attack these institutions, there might also be some people who work directly in these exchanges that could maliciously use the identities of their investors. This is a valid and understandable concern from the investor's point of view.

So, is there a way to buy Bitcoin without participating in the KYC process, and if yes, how?

Transfers on the Blockchain

Transfers of digital currencies such as BTC are recorded in a public distributed ledger called the blockchain and the verification of these transfers is done through cryptography, by nodes on the chain. The blockchain is a decentralized system and anyone on the internet can view the transaction, the wallet addresses and the amount of cryptocurrencies transferred.

Although the transfers and the wallet addresses can be seen on the blockchain in the form of numbers, the owner's identity, face, or name are totally anonymous.

With the KYC Process, verified identities of the users, including their faces, are attached to this user and this goes against the decentralized nature of the blockchain as it reveals the identity of the user who is doing the purchase.

How to Buy BTC Anonymously?

There are a few centralized crypto exchanges (such as Digitex) that allow investors to buy Bitcoin without KYC. However, like most other exchanges, they cannot offer their services to users in the US or from other restricted countries with strict laws. Notably, they cannot offer services to citizens and residents of the United States, Hong Kong, the Democratic Republic of Congo, Iran, Myanmar, Sudan, Iraq, Côte D'Ivoire, North Korea, Syria, Zimbabwe, Cuba, Belarus, Liberia, Central African Republic, Libya, Mali, Somalia, Yemen.

Users can also buy BTC through Bitcoin ATMs without needing to share their personal information. The only problem here is that these ATM machines will charge a fair amount of commission, as they include miner fees and operator fees. On average, these fees are roughly $12-$25.

Another thing to consider about anonymity is that these ATM machines will have cameras around them.

There are several platforms which offer peer to peer trading, where the users can trade without third parties and without revealing their identities.

You can directly interact with the users on these platforms to carry out your requested purchase.

Paxful, LocalBitcoins, Remitano, HodlHodl, WazirX, Bisq and Bitquick are some of them.

If you would like to hide your information completely, you can connect to these platforms by using a VPN. You can also create a new e- mail address and even use a separate SIM card for these trade platforms.

These platforms also allow the use of a prepaid card which you can purchase from supermarkets or convenience stores, but these cards will not be available in all countries.

To avoid any mistake, there are a few things to consider before buying from any P2P platforms.

- Make sure to read the comments of the previous purchasers,

- If possible, try to use cash payments directly to the person,

- Make sure to get screenshots of the bank transfers.

Keep in mind that you might not be able to avoid scams even if you are careful and cautious in your verification before the purchase. If anything feels strange or off, follow your intuition and always try to interact with known and well-established platforms and peers.

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