How to convert BTC to Fiat without KYC — 2021
With increased regulatory scrutiny exchanging bitcoin for fiat without KYC is becoming increasingly difficult.
With increased regulatory scrutiny exchanging bitcoin for fiat without KYC is becoming increasingly difficult.
Gone are the days when the market was full of places that allowed you to swap bitcoin for fiat without undergoing identity verification.
Even p2p exchanges like LocalBitcoins, Paxful now require user identification to connect buyers and sellers.
So does that mean that selling bitcoin for fiat without divulging personal information is no longer possible?
Not entirely,
Albeit limited there are still options available today that allow you to sell your bitcoin for fiat currency without undergoing KYC/AML.
Let’s have a look…
Decentralized Exchanges
Decentralized exchanges (DEX) are a type of cryptocurrency exchange that allows for direct peer-to-peer transactions to take place online securely and without the need for an intermediary.
As the name suggests these exchanges are decentralized, meaning there is no central authority managing them. The transactions take place through smart contracts that manage and record every transaction onto the blockchain.
In terms of privacy, you do not have to deposit funds to exchange wallets whose private keys they do not hold. Since the wallets are external to the exchange, the exchange has no control over your funds, and at no point do you have to disclose your private keys to anyone.
Some of the salient features of DEX include:
- Non-custodial
- Privacy
- No KYC/AML
- Trustless Transactions
Some of the top Decentralised Exchanges (DEX) include:
1. BISQ
2. Hodl Hodl [not supported in USA]
3. LocalCryptos
Crypto Exchanges
One of the most popular ways to buy/sell cryptocurrency is through exchanges. The top 5 crypto exchanges see daily trade volume in billions with the number spot held by Binance, whose daily trade volume has crossed $20 billion.
Unlike DEX, these exchanges are centralized, which means the transactions are monitored and executed by a central authority [the exchange].
As for your funds, most of these exchanges require you to deposit your funds in exchange-controlled wallets which means that you do end up losing control of your funds while you are using these platforms.
And for high-volume trades that involve fiat currency, almost every exchange requires KYC/AML.
There is one crypto exchange that currently allows you to sell your bitcoin for fiat without KYC. And it is Binance.
But there is a catch, the volume is heavily capped. According to Binance,
Users must complete the ‘Basic Info’ identity verification [name, address, and date of birth] to continue and get a transaction limit of €100/total.
Bitcoin ATM
Bitcoin ATMs operate in a similar fashion as traditional fiat ATMs, the only difference being that they allow you to buy/sell bitcoin for fiat.
These ATMs can currently be found in 68 countries and you can use this map to locate one near you.
[Source: Coin ATM Radar]Depending on the company operating the ATM and the location, the KYC rules, and withdrawal limits may vary.
But there are quite a few that do not require KYC to buy/sell bitcoin especially for lower limits.
Most ATMs have a withdrawal limit from $1000-$5000/per person.
Conclusion
If you wish to exchange high volumes of bitcoin for fiat then your best option is a decentralized exchange [DEX]. With a decentralized model that directly connects you to a buyer, they are the safest and most convenient way to sell your bitcoin for cash with any KYC scrutiny.
For lower volumes, you can consider bitcoin ATMs but do keep in mind that they are location specific and may not be easily available.
This is a companion discussion topic for the original entry at https://insights.blockonomics.co/how-to-convert-btc-to-fiat-without-kyc-2021-d75370e8f8e9/