When you are almost watching charts and figuring out decent latte art, Bitcoin shoots up. Your hands are moving swiftly over the keyboard when suddenly a pop-up shows: “Make sure your passport photo has no glare and no filter.”
When you finally get good lighting on the screen, the candle has started to change from beautiful green to fading red. KYC is the frustrating version of Know Your Customer that prevents frantic exchanges from happening quickly.
In this blog post, I will explain the purpose of KYC and how to pass it in crypto trading without getting stressed.
Let’s start!
The Purpose of KYC (and Why It Still Leans One Way)
Regulators favor KYC as it reveals who owns a wallet, prevents money laundering and makes tax offices happy. Those in the financial sector mostly agree, as it gives them a few legitimate benefits.
- Bulk-buyers to benefit from higher limits. It is simpler to move a lot of money when the exchange trusts you.
- Banking with confidence. Having a verified account reduces the suspicion for traditional banks.
- There will be less fraud. Both chargebacks and phishing scams decrease as every transaction is recorded on paper.
Still, the arrangement seems to favor corporations. Sending your utility bills to a cloud server you’ve never interacted with is risky, as this information could attract hackers and create a good record for any authorities.
No-Doc Trading Can Be Attractive, But It Hides Many Risks
After midnight, searching online for trade crypto often brings up collections that praise no KYC crypto exchanges. Signing up is as easy as supplying your email and a shrug; because they avoid compliance, fees are very low; your passport is just as untouched. Your experience with freedom usually makes sense, but you find out the details in the small texts:
- Withdrawal ceilings. Setting a limit for either daily or weekly gaming will require you to verify your identity or simply wait before you can continue.
- Limited items on the menu. In parts of the world with tight regulations, some tokens no longer appear to users.
- Here-today, 404-tomorrow. If authorities crack down, domains may disappear in a short period of time.
- Customer-service tumbleweeds. Without help from a tech, your ticket’s message may sit ignored.
All in all, no-doc platforms are swift like Formula-1, but you should imagine what happens if a tire bursts at high speed.
Finding a Good Balance on Privacy
Many crypto exchanges now focus on privacy to strike a balance. An open-source VPN is better than a complete privacy solution since you want visibility to your trades. When you wish to deposit a small to medium sum, use the basic level of KYC and switch to higher levels only if that becomes useful to you. Before making any payments, spend some time checking and reviewing.
- Checking the proof-of-reserves documents. Every day, maths overpowers the minds of marketers.
- The usage of cold storage areas. The best place for most funds is not an online wallet; those are the first favorites for hackers.
- Available to use open-source snippets. The sooner code is open to everyone, the sooner the bugs are seen.
- Having actual people on the chat. It’s risky to send money if every bot and every red chicken appears in Telegram or Discord.
- A postal address that can be viewed in Google Street View. There is no such thing as a jurisdiction called “somewhere on the blockchain.
The Quick Smell Test in Five Lines
- Order-book depth: Is it possible for a moderate market order to affect price by more than just a few cents?
- Has the former been hacked and did the company publish a real-life post-hack analysis? Good sign.
- If you need to exit your position, begin with using the coffee-money strategy.
- There should never be any unexpected charges when using a bank.
- When moderators avoid tough topics, assume something is amiss.
How to Pass Verification Without Getting Stressed
Sometimes, you have to verify your information such as when your bank needs a fiat ramp or new rules are made overnight. On that day, stay mindful of the effect you have on nature.
- Create a brand-new email and refresh your browser by making a new user profile.
- Better yet, use a dedicated hardware device for 2FA (or increase it as much as possible).
- Provide simply what the law requires and avoid sharing any personal information the law doesn’t need.
- You should never store all your money on any exchange, regardless of its type or whether your cousin made it.
- Make sure you have access to more than one method for moving your coins, just in case you lose the main one.
Ending Word: Agility Helps to Conquer Anxiety
As time passes, governments are determined to tax every bit of bread and their efforts in tracking us won’t be lessening. Being agile is your main advantage: use one place for significant fiat transactions and another place requiring fewer details when you have to be quick and private.
Be always curious, verify everything and take a clear enough photo for a headshot, as an unsharp print could lose you money. Act wisely in business, sleep comfortably and keep your P&L figures heading higher.
