If you’re looking to purchase bitcoin without exposing your identity, this guide will tell you everything you need to know about buying BTC minus the KYC.
So you want to lay your hands on some bitcoin. Understandable. Your desire to circumvent draconian Know Your Customer (KYC) regulations, which threaten your privacy and even compromise your safety, is equally understandable. Thankfully, there are a number of KYC-free options available.
Buying bitcoin in 2020 is easy. You can purchase it from any number of cryptocurrency exchanges or fiat-crypto mobile banking platforms like Wirex and Revolut. You can buy it from peer-to-peer marketplaces, use a bitcoin ATM or the Cash App, or organize an in-person transaction. A more challenging proposition is to make a bitcoin purchase without handing your identity over along with your cash.
There are many valid reasons for refusing to jump through the KYC hoop. Crypto users are at an increased risk of theft and extortion, and breaches that expose customer names, email addresses, birthdays, home addresses and on-chain activity (bitcoin balances and addresses) is not uncommon. Your private information is valuable and by leaving it in the custody of an exchange, you run the risk of it being harvested, packaged and sold to bad actors such as the IRS and DEA as Coinbase is currently doing.
If you’re entirely at ease with the idea of a stranger gaining access to this deeply personal information, it could be that KYC doesn’t bother you. But what if other sensitive information is compromised: your bank account details, social security number, driver’s license, passport… We’ll go ahead and assume that you’d rather keep such info under lock and key. Which is why you’ve alighted on this article.
Keep your personal data off the grid and use one of the following options next time you’re looking to buy bitcoin.
Use a P2P Platform
Privacy rating: Medium. (The seller still knows your identity, and you must rely on them acting ethically.)
Peer-to-peer platform LocalCryptos is probably your quickest bet for swapping cash for bitcoin online: all you need is an email address. Formerly known as LocalEthereum, the site underwent a rebrand last year after adding BTC support and lets users buy and sell BTC or ETH using their preferred payment method. There are currently 37 payment methods available including bank transfer, PayPal, cash in person, MoneyGram, gift card, Revolut and Western Union. Smart contracts are used for ETH transactions and P2WSH for bitcoin.
After signing up, simply select “buy” from the “I want to…” dropdown and choose bitcoin, your payment method and location. You’ll then see a list of sellers, along with their location and price. LocalCryptos uses a reputation system to save everyone time; it also favors a noncustodial escrow service to ensure no-one gets ripped off.
All in all, LocalCryptos is a godsend for ordinary folk wanting to buy and sell crypto without acceding to KYC. Little wonder it’s used by over 100,000 users worldwide, with traders in 100+ countries.
LocalCryptos isn’t the only peer-to-peer exchange that dispenses with KYC checks, of course: Hodl Hodl is another one and boasts 25,000 global users; decentralized marketplace Bisq is a third option, though trade volume remains low and users are initially restricted to buying small amounts of BTC. In our view, LC is no. 1, though be aware that this method still requires disclosing your payment details to the seller, who could hypothetically be anyone – friend, foe, or government snitch.
If you want to avoid detection from chain analysis companies, meanwhile – the kind often employed by government agencies – consider mixing your coins and utilizing clever UTXO selection by using a privacy-oriented wallet like Samourai or Wasabi.
Use a Bitcoin ATM
Privacy rating: Medium.
According to coinatmradar.com, there are over 7,800 bitcoin ATMs in 72 countries. The United States leads the way with well over 5,800 ATMS, Canada has over 750 and the UK over 250. In any case, using a bitcoin ATM is one way of buying bitcoin without suffering KYC (although some require an ID card): you pay in cash and the ATM sends bitcoin to your digital wallet.
To up your opsec even more, locate the BATM using a Tor search rather than your regular network. You might also be mindful of CCTV cameras in the vicinity of the bitcoin cashpoint, and though full mask and throwaway SIM card mightn’t be necessary, those requiring full stealth will surely consider it.
Mine Altcoins, Swap for BTC
Privacy rating: High.
This one’s certainly more laborious than going through a P2P market but it remains a worthwhile option. The days of solo-mining bitcoin may be over, but it’s still possible to profitably mine other cryptocurrencies which can in turn be swapped for BTC using a privacy-friendly exchange or the aforementioned P2P platform. If you’re planning to use a non-KYC exchange, check in advance that the coins you’re mining are available to trade there.
Buy Bitcoin in Person
Privacy rating: High
If Person A buys bitcoin from Person B, the only people who know about the transaction, theoretically at least, are those involved in it. As mentioned, P2P platforms like LocalCryptos facilitate in-person transactions so that’s one option, although given how many people now hold bitcoin, it isn’t the only one: a family member, friend or friend of a friend might own BTC that they’re willing to sell you. You could find a willing seller on Reddit or Twitter who lives nearby.
Such an arrangement raises security concerns, of course: how can you be sure that the person will dispatch bitcoin to your address after you hand over money? Use common sense and only transact with people you know and trust. If you do elect to go ahead and buy from a stranger, bring along a Mike-from-Breaking-Bad henchman who can ensure the transaction goes down without a hitch.
These aren’t the only options for buying bitcoin minus KYC; many exchanges have yet to comply with this mandate, though customers must still trust them to act ethically and refrain from sharing the limited data they have with third parties. Regardless, we’d advise you to never leave your coins sitting on an exchange.
Whatever route you go, don’t forget: your privacy is precious. Treat it as such.