As regulatory scrutiny increases, converting bitcoin into fiat without KYC (Know Your Customer) procedures is becoming more difficult, and there are fewer and fewer places to exchange cryptocurrency without identity verification.
But does this mean that converting bitcoins into fiat is no longer possible without divulging personal information? Not exactly. Though with some restrictions, there are still options available today that will allow you to avoid KYC. That's what this article is about.
Decentralized Exchanges (DEX) are a type of cryptocurrency exchange that allows for direct peer-to-peer (P2P) transactions online securely and without an intermediary.
As the name suggests these exchanges are decentralised - they are not controlled by a central authority - and the transactions themselves take place through smart contracts that record each transaction onto the blockchain.
As far as privacy is concerned, you do not have to deposit funds to decentralised exchange wallets. Since they are external to the exchange, it has no control over your funds and you have no need to disclose your information.
Features of DEX include:
- no KYC/AML;
- trustless transactions.
Some of the top DEX include:
- Hodl Hodl;
One of the most popular ways to buy or sell cryptocurrency is to use crypto exchanges. Unlike DEX, these exchanges are centralised, which means that transactions are monitored and executed by a central authority.
Most crypto exchanges require you to deposit your funds into wallets controlled by the exchange itself. This means that while using these platforms you are losing control of your funds. In addition, KYC is usually required for high-volume trades.
However, there are some crypto exchanges that allow you convert bitcoin into fiat without a KYC procedure. Among them, for example, Binance, which has introduced a limit on the volume of transactions, before which verification of identity is not required.
Bitcoin ATMs, about which we wrote before, operate similarly to traditional fiat ATMs, the only difference being that they allow you to convert bitcoin into fiat (and vice versa).
Depending on the company operating the ATM and the location, the need for KYC and withdrawal limits may vary. However, quite a lot of bitcoin ATMs do not require KYC to make an exchange, especially at low limits, mainly from $1000 to $5000 per person.
So, if you wish to exchange high volumes then the best option is decentralised exchanges that allow you to exchange bitcoin into fiat without KYC conveniently and safely. For lower volumes, you may use bitcoin ATMs, but keep in mind that they are not available everywhere.