Anonymous investing is one of the pillars of the popularity of Bitcoin and other crypto, but due to increasing regulations, anonymity is becoming less and less of an issue. For example, many crypto exchanges require you to identify yourself before you can trade. This policy is called Know Your Customer (KYC) and is mandatory for European crypto exchanges, for example.
However, there are still many exchanges where you can trade anonymously. We list the 5 most popular exchanges. We also explain why trading Bitcoin and crypto is never 100% anonymous and share some things to watch out for.
You can invest anonymously on these crypto exchanges
More and more crypto exchanges are asking for identity information. They are required to do so based on regulations. For example, Dutch crypto exchanges must verify your identity as one of the requirements to maintain their license to trade in crypto.
Still, there are crypto exchanges where no identity information is requested. We list 3 of them.
Bitcoin and Dogecoin coins with Shiba Inu Kabosu (Image: Unsplash)
Descending crypto anonymity at Binance
Currently it is still possible to create an unverified account, but trading options on the platform are then limited. They have also restricted withdrawal options. Only when you verify your account by confirming your identity will you be able to use all the facilities.
Because Binance is increasingly committed to compliance, the anonymous account is expected to be phased out soon. We saw earlier that this leads to huge losses.
Fortunately, when checking live Bitcoin and crypto prices, you can simply remain anonymous. In fact, you can find these 7 days a week and 24 hours a day without logging in to Tradeincrypto.com.
Bitcoin (Image: Pexels / Karolina Grabowska)
Crypton exchange: focused on privacy, but limited
The Crypton Exchange is not the most well-known exchange, but it is a trading platform with history, as it has been around since 2013. The focus of this exchange has been on privacy and anonymity since its inception.
That’s why you can trade Monero (XMR), for example, on this exchange. On the other hand, they only offer 6 crypto coins, so the offer is limited.
Poloniex: comprehensive crypto exchange with low fees
Perhaps the best-known crypto exchange that does not ask for identification is Poloniex. Officially based in Seychelles, this exchange is one of the largest crypto exchanges in the world.
In addition to the website, you can also use the Android or iOS app. You can trade unlimited and also buy crypto for fiat money such as Euros and Dollars. In addition, you can withdraw $10,000 per day. If you use 2-factor authentication they increase this limit to $50,000.00.
On the platform, besides the regular trading options, you will also find options for strike, futures trading and an NFT marketplace.
Crypto (Image: Pexels / Karolina Grabowska)
Bitcoin and crypto: anonymous or pseudonymous?
By the way, “anonymous” is a misleading term when investing in Bitcoin or crypto. Because you always have to make an initial cash deposit, it is virtually impossible to invest in Bitcoin and crypto completely anonymously. However, unlike a cash transaction (where your name and account number are visible), a crypto transaction only shows a wallet address and private key.
This makes it impossible for third parties to see who is behind such a transaction. This is why people say that investing in Bitcoin and crypto are pseudonymous.
Furthermore, as a user, you can also remove your pseudonymity without being noticed. For example, of course, you can use an anonymous exchange, transfer the money to your wallet and then order something and have it delivered to your home.
Also, whether you use an anonymous account or not, you are required to report your holdings in Bitcoin and crypto to the IRS.
Coins (Image: Pexels / Worldspectrum)
What to look out for when choosing an anonymous exchange for Bitcoin and crypto?
For many people, the feeling of having more privacy is nice after all. That’s why anonymous crypto exchanges remain popular. Still, there are a few things you need to watch out for. We list 3 of them:
Although as a consumer you may legally invest on an unlicensed crypto exchange, unlicensed crypto exchanges are not allowed to offer services to Dutch customers. Thus, by definition, anonymous crypto exchanges do not have a license to do business. This means they are not supervised. This makes it extra important to research reliability of anonymous crypto exchanges.
Because one trades anonymously, loss of crypto coins due to a hack or other form of crime on the exchange is often not insured. It is therefore wise to have the private key of your crypto as soon as possible after purchase. You get it by transferring your crypto from an exchange to your own wallet.
Beware of changing policies. Many crypto exchanges are forced by regulations (such as in Europe and America) to switch from anonymous trading to compliance. It is therefore good to regularly check if your crypto exchange is changing its policies.
Of course, you can also practice investing in crypto and Bitcoin anonymously. You can do this, for example, by simply opening a free account at virtualinvestment.com.
Stay up to date with the latest price developments?
You can always follow the developments yourself with our WANT analyses and overviews. Of course, you can also follow the BTC and live cryptocurrencies 24 hours a day if you want to stay updated in real time.
Note: We never give financial advice, so you can’t interpret our contributions that way either. Always do your own research and decide on rational grounds if, when, what and how much you want to invest.