Home > Why so much identity verification… which sites don’t require ID to buy Bitcoin?

Why so much identity verification… which sites don’t require ID to buy Bitcoin?

id-verification

 

You may have heard that to buy bitcoin one needs to submit a series of identification documents to the trading site. Such documents may range from copies of passports & utility bills, to selfies of yourself holding a custom message. When I first stated using bitcoin in 2013 none of the exchange sites asked for passport or utility bill photocopies. Now in 2017 virtually every bitcoin exchange is obliged by law to do full KYC (know your customer). This is to prevent cyber-crime and money laundering. Some anarchists say the government worries that you might be gaining too much economic freedom.

All things said, it is very important to be aware when seeking recommended places to buy bitcoin without ID. Even if you choose a full-KYC exchange you should still be realistic and take precautions to protect against identity theft or abusive practices by exchange operators.

Note that most people are 100% fine getting their cryptocurrency through normal verification procedures. Ask yourself do you really need to obfuscate your existence or not.

Recommended place to buy Bitcoin

1
Min. Deposit
$50
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Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
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Description:
eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Payment methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.

How to stay anonymous when buying bitcoin

Should you need to stay anonymous when buying bitcoin, this is possible but expect to pay a higher cost per bitcoin. Most sites are charging premiums of 20% to 40% for customers without identification. Another thing to remember is that not each method will be the same. There are means for buying cryptocurrency with no ID that may require you to meet up in person. Others may require wait periods of up to 3 weeks before the digital assets are released from escrow to your wallet.

Not all anonymizing procedures are as tiresome though. I’ve ordered each one below by the ease at which you can purchase bitcoins while keeping your identity relatively private.

Here are the best places to get bitcoin without ID:

    1. eToro – When opening an account with eToro you don’t need to give any identification when depositing less that £2,000. This means that you can very easily and quickly invest in bitcoin and other cryptocurrencies. Above £2,000, you will be required to provide KYC documents, this is needed for anti-fraud purposes. One of the huge advantages of using eToro is that it is a regulated broker both by the British FCA and the Cypriot CySEC, meaning that your funds are secure up to £80,000. If the company were to become insolvent you would still be able to claim back anything under £80,000 which is a real positive when looking to invest in cryptocurrencies, especially given the poor reputation some of the exchanges are getting.
1
Min. Deposit
$50
Exclusive promotion
Our score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start trading
Payment Methods:
Wire Transfer, Bank Transfer
Full Regulations:
CySEC, FCA
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
  1. Buysomebitcoins – also a leading site to buy with no ID verification using a Visa/Mastercard. The exchange is registered in the United Kingdom and has gathered some good user-reviews. Commissions are extremely high for buying without ID: expect to pay 30 percent. Fees are lowered if you submit ID. Such discounts are titled “Verification rewards” by Buysomebitcoins. Two exist: an ID “verification reward” and a “card ownership verification reward”. You may be asking how does Buysomebitcoins get around the KYC obligations imposed on exchanges. Well, supposedly their site is a “P2P Marketplace represented by multiple companies in different countries” – thus entitling the same loopholes for buying bitcoin without ID as those localbitcoins buyers currently benefit from.
  2. Shifting sites – a great (much cheaper) alternative. It is indeed possible to anonymize an ID-verified purchase of bitcoin (assuming you got the BTC on a full “KYC” exchange). Such a procedure is sometimes referred to as “altcoin shifting”. Note that specialized blockchain forensics experts can, and sometimes do, follow coins that have been shifted. Nevertheless, the coin shifting procedure is relatively simple:
    1. Someone buys bitcoin (or any other crypto asset) on a major exchange such as Coinbase. Their ID is verified and therefore these coins are “tied” to their name.
    2. The coins are withdrawn from the major exchange, onto a cryptocurrency-only trading site like Binance, Yobit, or Shapeshift. Because government fiat currency deposits are not available, the exchange is not required to verify users’ ID.
    3. The user then trades their bitcoin for any other crypto asset and withdraws the new altcoin to their wallet.
    4. Voila! Now only the 2nd exchange knows where those new coins came from. The first exchange only sees the coins being sent to the 2nd exchange’s address. Because the trading happens off-blockchain, it is very hard to trace what went on.
    5. Any other crypto-only exchange can then be used to switch the user’s altcoin back into bitcoin – totally anonymously.
    6. This process can be repeated using a vast list of alternative trading sites – each time further anonymizing the coins.
  3. Livecoin – very popular in the Russian crypto market (yet gets many English-speaking users). Traders can deposit and withdraw via Captialist, Advcash, Qiwi, Payeer, or PerfectMoney. No form of vetting is required for using such deposit/withdraw mediums. Livecoin gets over 12 million monthly visits, so it stands as one of the most popular options here. Fees are relatively acceptable (expect to pay ~10 percent) compared to other methods for maintaining your privacy.
  4. Indacoin – similar in nature to the Buysomebitcoins website. Customers can use their credit card to acquire bitcoins without registration or proving who you are. The major downside to Indacoin is the huge markup of up to 50 percent compared to standard exchange prices. Transaction limits are set at $100 usd for first-timers, $200 usd after 4 days, and $500usd after 7 days. Aside from the outrageous fee, Indacoin is a relatively hassle-free & beginner friendly website.
  5. Paxful – operating since 2015 in Wilmington (USA) , this is another prominent person2person platform where sellers and buyers make trades directly between themselves. Just like Localbitcoins, the p2p nature of the exchange allows users to keep their real names and identity relatively secret. The major advantage of using Paxful is the amount of payment methods available (300+). The most popular deposits types are iTunes/Amazon Gift Cards, Paypal, Skrill, NetTeller, Webmoney. Users can also make cash purchases via Western Union, MoneyGram, cash in person, cash deposit to bank, or using a Bitcoin ATM. While there are some sellers that ask for your real name for large volumes, I have never been asked for a copy of my passport for smaller orders under $1000 usd. Paxful is currently the best site to buy bitcoin without ID because of the range of choice for depositing money.
  6. WeSellCrypto will allow you to buy small amounts (~15 usd) with PayPal as they don’t bother checking your ID unless you do larger transactions. Update: this site is having issues with PayPal – trading has been disabled for now. Alternatively you can use Localbitcoins or Paxful for Paypal purchases.
  7. CoinATMradar – a super handy website featuring an interactive map of global bitcoin ATMs (aka bATM). Simply search for your location, select the nearest machine, and check the requirements for buying. Note that there are over 55 bATM manufacturers and 125 operators around the globe. Knowing who made and who operates your chosen bATM will give you extra insight into the buying process. I say this because some do sell bitcoin without ID being requested, while others will need a passport before exchanging cryptocurrency for your fiat paper money. Keep in mind that just like buying with cash, bATMs take a higher commission relative to the spot price. Expect premiums of 10 to 20 percent, depending on the machine operator.
  8. Bisq – the most reputed decentralized person2person crypto exchange, in operation since 2016 (previously known as “Bitsquare”). Also a good place to buy ethereum without ID. Read these points before using:
    • I only recommend Bisq for more advanced users. You should be comfortable with managing bitcoin private keys, and maintaining your PC’s security.
    • Users must download the software to connect up to the network and make trades. Officially the software is still in beta testing, but it can still be used to trade with others without registration – and doing so relatively anonymously.
    • No identification is needed to trade, but – just like with Localbitcoins – your name will be visible on the seller’s bank statement.
    • What I love about Bisq is that it is essentially a wallet with multisig capabiliites. Such a system allows you to choose an arbitrator for each trade. Arbitrators act as intermediaries for resolving problems – similar to how Paypal disputes work, just in a decentralized manner.
    • For a longer explanation, watch this Youtube video of Bisq cretor, Manfred Karrer, giving a presentation of the exchange.
    • For those wanting to sell bitcoin without ID using Bisq: be sure that your bank is bitcoin-friendly. In some cases sellers have had their accounts closed for receiving transfers. Although the bank never knows that transfers are arranged through Bisq, such institutions can get nervous when anything new starts threatening their business model. There is a Bitcointalk forum post that keeps tabs on which banks are bitcoin-friendly and which are not.
  9. Tumbling/mixing services – this was a pretty cool idea that worked for some time. Now it’s hard to know which services can be trusted and which are not keeping logs etc. Some new altcoins have built anonymity or mixing right into the core transaction protocol. Look into Dash, Monero, or Zcash.

 

Some sites have excessive ID vetting

Some exchanges really are worried that they will get shut down by the FinCEN should they not know every single detail about their customers. Others take advantage of the KYC-craze to collect information on their users personal and commercial habits. Of all the major exchanges these three are currently receiving slightly negative reviews with regards to overbearing KYC verification methods:

  • Bitstamp – by far the worst personal information requests have been made by Bitstamp support. When users go beyond certain deposit/withdraw thresholds they then get sent intrusive information requests beyond the usual passport/utility bill combination.
  • Gemini – long verification wait times. Occasional account flaggings & automatic closures have been reported.
  • Bitfinex – very long verification process, significant amount of documents required.

Please note that while the above sites may not have smooth verification processes, they remain very trusted and popular platforms. Millions of users trade on each site every month. Read my guide to get further information on how to recognize a good vs a bad bitcoin exchange.

 

Protect your documents against identity theft

Just realize that this is the new age where your ID is scattered all over the internet. If a web-server gets hacked, then all files can potentially be stolen and used elsewhere. For this reason I would recommend choosing the safest sites only. Check my list of the most popular bitcoin exchanges to get an idea of secure trading sites that people like to use.

Best practices recommend that exchanges keep users’ personal ID information on a separate server. Such a server should be offline and only connected up when the initial vetting process is underway.

A good method you can use to prevent identity theft is to water-mark any documents you submit. Some users like to write a message such as “for Coinbase only” on their passport copy. Such techniques prevent malicious actors from easily using your ID to open an account elsewhere.

Please note that in most cases your personal information is safe. Large exchanges are increasingly required to follow very strict safety measures and all store users’ files offline.

 

Have you any advice for ID verification or staying anonymous when buying bitcoin? You can let the community know by leaving a comment below.

 

Recommended places to buy Bitcoin

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start trading
Description:
eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Payment methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
2
Min. Deposit
$50
Exclusive promotion
Our score
9.3
Trade on popular Crypto markets
Go long or short on cryptos from 10p a point
A trading partner you can trust
Start trading
Description:
Founded in 1999, part of GAIN Capital Holdings. Licensed in highly regulated jurisdictions, FCA, IIROC, NFA, CFTC, CIMA,FSA. Payment methods ACH, debit card, bank wire transfer. $50 minimum deposit.
Payment methods
Debit Card, Bank Wire, ACH, Credit Card, PayPal
Full regulations list:
CIMA, NFA, CFTC, FCA, IIROC, ASIC, FFA Japan, MAS, SFC of Hong Kong
Forex trading involves significant risk of loss and is not suitable for all investors.
3