The use of Know Your Customer (KYC) in crypto may be viewed by many as a barrier to the Bitcoin (BTC) standard, which encourages anonymous peer-to-peer transactions. It continues to promote the use of KYC and anti-money laundering (AML) to ensure investor safety and financial fraud prevention.
While most crypto exchanges have started implementing regulatory advice To stay at the forefront of crypto adoption, investors still have the option of opting for crypto exchanges that promote greater anonymity without requiring KYC procedures. Will investors be safe or not?
matter of trust
anonymity Owners of crypto exchanges that do not have KYC (or do not comply) often choose to remain anonymous to avoid legal scrutiny. As a result, investors must have a high level of trust in the person responsible for operating the web trading.
On the other hand, decentralized exchanges such as dYdX use trustless protocols for building a community-controlled trading platform. Even without KYC mandates on the platform.
Therefore, a background check of the platform And who is working is therefore paramount when trading on a platform without KYC.
Blockchain will remember it forever.
Crypto is often seen as a money laundering tool. but the transaction cryptocurrency The illegal use of cryptocurrencies has continued to decline year after year. It’s easy to do without KYC verification, but a Chainalysis study confirms that only 0.15% of all crypto transactions in 2021 are linked to illegal activity.
In addition, keeping records on the blockchain allows authorities to verify the owner of the transaction. and deter bad actors from using both KYC and non-KYC platforms to support their practices.
The permanence nature of blockchain allows authorities around the world to hunt down scammers, fraudsters and money launderers for the crimes they committed years ago.
Not your keys, not your coins
One of the biggest concerns when using crypto exchanges is the lack of control over assets. Cryptocurrencies Stored in crypto exchanges, which means giving the exchanges private keys.
Using crypto exchanges without KYC verification puts investors at risk of permanent loss of funds. While both exchanges — both compliant and non-KYC compliant — require investors to hand over their crypto assets to third parties. But KYC compliant exchanges will build more trust among investors and regulators.
The answer to the question ‘Are crypto exchanges without KYC safe’ is that, with or without KYC, crypto investors remain vulnerable to external factors such as: The intention of the website owner and smooth business operations
In addition, investing in crypto exchanges without KYC also comes with trading value restrictions. Existing tokens and other services that the service provider offers