How to Buy Cryptocurrencies without Verifying Your Identity

Cryptocurrency is getting more user-friendly, more accessible, and also much more regulated. This makes it a lot less “wild west” but also means it’s a bit harder to get started in crypto without going through the laborious KYC (Know Your Customer) requirements most exchanges have now been forced into adopting. Luckily, there are still ways to make peer-to-peer crypto purchases. If you’re just looking to remain anonymous (in the true spirit of crypto), you may want to check out these exchanges.

Also read: 5 of the Best Privacy-Centered Cryptocurrencies

LocalCryptos: peer-to-peer marketplace

As of April 2020, LocalCryptos (formerly LocalEthereum) may be the premier peer-to-peer crypto-fiat marketplace with no KYC requirements. In short, LocalCryptos lets you buy cryptocurrency with national currencies without asking for any form of ID.

Here’s how it works:

1. Sign up.
2. Enter a few basic pieces of information (nothing identifiable is required).
3. Find an offer in your preferred currency using a payment method you can access (PayPal, CashApp, Wise, Zelle, etc.).
4. Start a transaction with the seller.
5. Wait for them to put funds in escrow.
6. Send the payment.
7. Get your crypto paid out to your wallet once the seller confirms.

The site is well-designed, the system is fairly good at keeping scams to a minimum, and you can typically find prices that are fairly close to the market. You can chat with the sellers over their encrypted messaging system so you can ask questions and find out how reliable they may be.

Be aware that some sellers may ask you for ID to be sent over the encrypted messaging system before they fund the escrow. That’s not necessarily a problem – they may just check it and delete it – but that’s a call you will have to make. Even a seller with a good reputation may be selling IDs on the side, after all.

Also read: How to Make Your First NFT

Bisq: decentralized exchange

If LocalCryptos isn’t decentralized enough for you, you may prefer Bisq (formerly BitSquare). This is a fully automated, decentralized, open-source piece of software run using a Tor peer-to-peer network and governed by a DAO (decentralized autonomous organization).

It has built-in anti-scam and dispute resolution methods, including security deposits, account signing, trade limits that increase over time, multi-signature addresses, and arbitrators/mediators that get paid to resolve disputes from the security deposits paid by the party found to be in the wrong.

The system works quite reliably and well, and the safety mechanisms keep it relatively scam-free. It will require a certain level of comfort with crypto and tech to use, since you have to download software and go through a few steps, but if you’re interested in buying cryptocurrency through a decentralized exchange, chances are that you mostly fulfill those prerequisites.

Here’s how to get started and make your first transaction:

1. Download the software (available for most desktop OSes).
2. Connect a national/fiat currency account (Zelle, Revolut, SEPA, bank transfer, Uphold, AliPay, Moneygram, face-to-face, etc.).
3. Fund your Bisq wallet with Bitcoin (minimum of .006 to buy .001 BTC, which will be your initial trade limit).
4. Find an offer to buy BTC at the quantity and price you want.
5. Send the listed security deposit and transaction fees to the trade wallet where they’ll be held in escrow until the trade is complete. (You get them back if there aren’t any problems.)
6. Confirm the trade, send the payment before the time limit runs out, and mark the payment as sent.
7. When the seller receives your payment, they’ll release the Bitcoin and your security deposit.

The biggest issues you’ll face with Bisq are the relatively high prices and the limits you’ll initially have on your account. Due to the increased risk, sellers often mark up the market prices by up to 20 percent and find sellers who will sell you the .01 Bitcoin you need to get your account signed and marked as reliable. It can be difficult, especially if you want to pay a reasonable price. You can make your own buyer listing, though, listing the price and quantity of your choice and seeing if a seller bites.

Also read: 5 of the Best Bitcoin Exchanges to Trade Your Cryptocurrencies

Bitcoin ATMs

If you live near a major population center, you probably have a Bitcoin ATM somewhere nearby. These are even more straightforward than Wall of Coins, since you just go to them, follow the instructions on the screen, insert cash, and get your Bitcoin (or other crypto). No ID, no wait, just Bitcoins from a machine. These tend to come with a sizeable fee, though. I’ve seen them go as high as 20%, which makes them less of an option if you’re looking for a good deal. Always check the market price before using a crypto ATM so that you know if they’re charging you fairly.

You can find a fairly comprehensive map at Coin ATM Radar.

Others

No KYC

• HodlHodl: No KYC, fairly well-known and trustworthy. It seems to work partially like LocalCryptos and partially like Bisq. May not support U.S. trades.
• LocalCoinSwap: KYC is purely optional (i.e., it’s there if you want the extra layer of protection). LocalCoinSwap is pretty popular and supports a lot of countries, cryptocurrencies, and payment options.
• LocalMonero/AgoraDesk: No KYC. Like LocalCryptos but just with Bitcoin and Monero. Generally well-regarded.

Some KYC

• Paxful: Another popular P2P exchange that, like LocalBitcoins, now requires ID for trade volumes of $1,500 and for anyone who wants to post an offer or make a bank transfer.
• Athena Bitcoin: Like Wall of Coins but with KYC starting at $400 USD.

To KYC or not to KYC

Cryptocurrency exchanges don’t want to make life harder for legitimate crypto enthusiasts, but the regulations that many of them have to comply with typically result in some pretty onerous sign-up and verification processes.

If you don’t mind providing ID and going through some bureaucratic hassle, conventional exchanges with KYC are a fine way to get into crypto. If getting that stuff together is a challenge for you or you have a philosophical aversion to it, you’ll have to deal with a slight learning curve to use a no-KYC exchange. No matter what, it is always best to keep your cryptocurrency safe as they are often unrecoverable.