Though you can buy Bitcoin without identity verification, it can be less convenient and more expensive.
If you've looked into buying Bitcoin or any other cryptocurrency, you may have heard of the Know Your Customer (KYC) process required by all the major, centralized exchanges. To buy and sell crypto without restriction, you need to provide your personal information and identity documents.
Exchanges do this to reduce risk. The KYC process helps them prevent fraud and money laundering. Not all crypto enthusiasts are keen on it, though. If you want to stay anonymous while you purchase Bitcoin, it's important to know your options.
Can you buy Bitcoin without verifying your identity?
Yes, you can buy Bitcoin without verifying your identity. There are two ways: decentralized exchanges and Bitcoin ATMs.
Although both options allow you to buy crypto without identity verification, they work much differently than the usual process. They also have their drawbacks compared to buying through a centralized exchange.
Decentralized exchanges
A decentralized exchange connects buyers and sellers for peer-to-peer transactions. There's no middleman to facilitate trades, like there is with centralized exchanges. A couple of the most popular decentralized exchanges are Bisq and LocalBitcoins.
Both buyers and sellers can create offers on decentralized exchanges. If you want to buy Bitcoin, you have two options. You can create an offer with the amount you want to buy, the price you're willing to pay, and your payment method. Or you can browse seller offers. These include the seller's price, the amount they have available, and the payment methods they accept.
When you've agreed to an offer, you send the money to the seller. The seller then sends the crypto to your wallet. Decentralized exchanges have security features such as escrow services, security deposits, and arbitration to ensure no one gets scammed.
This type of exchange is a good way to buy and sell crypto without verifying your identity. But there are a few potential issues:
- The process isn't as easy as buying through a centralized exchange. You need to sort through sellers to find one offering a reasonable price, the amount of crypto you want, and a payment method you can use.
- Prices vary quite a bit. In some cases, it's more expensive to buy through a decentralized exchange. Sellers may feel they can charge a premium because the buyer doesn't go through a KYC process.
- You need to have a crypto wallet, and it's your responsibility to keep your wallet secure.
Bitcoin ATMs
A Bitcoin ATM is just what it sounds like -- an ATM where you can buy and sell crypto. While some Bitcoin ATMs only offer Bitcoin, many also have other coins.
To find a Bitcoin ATM near you, visit Coin ATM Radar. It has a database of these ATMs all over the world. The exact process to buy and sell Bitcoin through an ATM depends on the machine, but here's how it generally works:
- To buy from a Bitcoin ATM, enter your crypto wallet address. Deposit cash into the ATM, and it sends you the crypto.
- To sell with a Bitcoin ATM, get the deposit address from the ATM. It usually provides a QR code you can scan. Send your crypto to the address. The ATM pays you in cash.
Bitcoin ATMs are more and more common, but you can only use this method if there's one in your area. It's not as convenient as buying crypto online, since you need to go to the ATM to buy or sell.
One more downside is that Bitcoin ATMs tend to have very expensive fees. It's not uncommon to see transaction fees of 10% or more. With Bitcoin ATMs, privacy comes at a cost.
Buying Bitcoin anonymously
To recap, you have options if you don't want to verify your identity to buy crypto. Decentralized exchanges, such as Bisq or LocalBitcoins, are the best place to start. These typically cost much less than using a Bitcoin ATM.
Before you go with either option, consider how important avoiding identity verification is to you. The KYC process can be inconvenient and slow, but you only need to go through it once with a centralized exchange.
If you're willing to verify your identity, you can choose any of the best cryptocurrency exchanges. Many are much more user friendly than decentralized exchanges or Bitcoin ATMs, and you could also get a better deal when you buy.
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FAQs
Answer: Most peer-to-peer crypto exchange platforms do not require you to follow the Know-Your-Customer or KYC and other verification guidelines. These include LocalCryptos, ShapeShift, BitQuick, and LocalBitcoins.com, Paxful, and DameCoins some of which you can trade up to a maximum of 2BTC.
Can I buy Bitcoin without SSN? ›
Can I buy bitcoin without a SSN? Yes, you can purchase bitcoin without turning over your Social Security Number in the process.
Can I buy Bitcoin on Coinbase without verifying my account? ›
As a regulated financial services company, Coinbase is required to identify the users on our platform. Per the Coinbase User Terms, we require all customers to verify their identity to continue using our service.
Can I buy Bitcoin on Cash App without verifying my identity? ›
You'll be asked to verify your identity with Cash App when you order a Cash Card, try to buy and sell Bitcoin, or invest in stocks. Verifying your identity with Cash App will make your account more secure and will unlock those additional features. To verify your identity, you must: Be over 18 years old*
Why do I need my ID to buy Bitcoin? ›
Exchanges can take weeks to process this information. KYC regulations are intended to help protect against identity theft as well. By asking users who want to make high value transactions to identify themselves, crypto exchanges can prevent criminals from attempting to steal those users' identities.
How to buy BTC anonymously? ›
8 tips for buying Bitcoin anonymously
- Use a dedicated computer or phone to connect to the internet. ...
- Choose a reputable browser that focuses on privacy. ...
- Run a full node through a VPN. ...
- Use a private email. ...
- Bypass phone verification. ...
- Set up a secure wallet. ...
- Avoid paying with credit or debit cards. ...
- Keep your keys safe.
Answer: It is easy to set up an account although you will need some information. Some information needed includes legal name, address, date of birth, SSN last digits, and plan for using Coinbase.
Does Coinbase report to IRS? ›
Yes, Coinbase reports to the IRS. It sends Forms 1099-MISC to the IRS for U.S. traders who made more than $600 in crypto rewards or staking. $600 is the Coinbase IRS reporting threshold for tax year 2022.
Does Binance require SSN? ›
Opening a Binance.US Account
Traders can also deposit and withdraw cryptocurrency, buy, sell and convert cryptocurrencies, and become eligible for Advanced Trading Feature. To sign up for Basic Verification, traders need to provide: Full legal name and date of birth. Social security number.
Can I buy Bitcoin on trust wallet without verification? ›
Depending on the crypto provider, user verification will be required before making a purchase. You will be redirected to their website in order to complete this process.
Zengo. Zengo is a great crypto wallet and exchange that offers users top-level security and privacy. Its unique keyless security system allows for an anonymous and secure storage of cryptocurrencies. With Zengo, users can buy up to $1000 of crypto anonymously i.e. without the need for a KYC.
How do I buy Bitcoins on Cash App without SSN? ›
How Can I Use a Cash App without SSN?
- Download the app and create an account with your email address.
- Connect your debit card information (*more on that below for those who aren't able to open a bank account with a SSN)
- Head over to the Send Money tab and select "I don't have a SSN."
Users under 18 can get access to expanded Cash App features in the US (including P2P transactions, Cash Card, Direct Deposit, Boost, bitcoin*, and stocks*) with approval from a parent or guardian (sponsor).
Do all Bitcoin ATMs require ID? ›
Some Bitcoin ATMs require one to verify a phone number, take a photo and/or scan a government-issued ID, such as a driver's license or passport, in order to prevent fraud for all transactions. Transactions of a lower amount, however, typically require little to no identification.
Are Bitcoin ATMs anonymous? ›
Are Bitcoin ATMs Anonymous ? Anonymity is a major factor in the security of crypto ATMs. BTMs ensure that the transaction is done through an anonymous exchange. Crypto currencies like Bitcoin are largely anonymous; therefore, Bitcoin ATMs uphold this anonymity when being used.
Does Bitcoin ATM report to IRS? ›
If you do not have accurate records of the cost basis of your cryptocurrency (or any other assets), when you sell it the IRS will assume that the cost basis is zero. That means that the entire amount of the sale will be treated as taxable capital gain.
How to buy Bitcoin instantly? ›
You can buy crypto instantly in the BitPay app or through the BitPay website online. Select the amount you want to convert to crypto and the cryptocurrency you'd like to buy. Enter your wallet information to confirm where you'd like to receive your crypto.
How to sell crypto without SSN? ›
- Go to your local DMV.
- Get driver's license or identification card.
- Register with Coinbase.
- Verify your identity using any of those two documents.
- Deposit your Bitcoins to Coinbase app.
- Add your bank account or credit/debit card tok payment section.
- Sell your Bitcoins.
11 Places To Buy Bitcoin Anonymously [Without ID Verification]
- Comparison of Platforms to Buy Bitcoin Without ID.
- #1) Pionex.
- #2) eToro.
- #3) CoinSmart.
- #4) Crypto.com.
- #5) Coinmama.
- #6) Binance.
- #7) Coingate.
Our primary purpose in collecting personal information is to provide you with a secure, efficient, and customized experience. Additionally, verifying your identity helps to prevent fraud from occurring on our platform. We will never sell or rent your personal information to third parties.
Yes you can. SSN is not mandatory for setting up a business in US. ITIN is your personal tax identification number and you only require this for filing taxes. Any person or business can register a business in US.
Can the IRS seize your Coinbase account? ›
Yes. A variety of large crypto exchanges have already confirmed they report to the IRS. Back in 2016, the IRS won a John Doe summons against Coinbase.
Do you have to report crypto under $600? ›
However, you still need to report your earnings to the IRS even if you earned less than $600, the company says. The IRS can also see your cryptocurrency activity when it subpoenas virtual trading platforms, Chandrasekera says.
What crypto wallet does not report to IRS? ›
Which crypto exchange does not report to IRS? Several cryptocurrency exchanges, such as KuCoin, OKX (except for P2P trades), and CoinEx, do not collect Know Your Customer (KYC) information or provide 1099 forms for most small traders.
How do I create a Bitcoin wallet without SSN? ›
- Use a hardware wallet.
- Ledger or Trezor both work fine.
- They automatically (with their app) generate both send and receive addresses.
- Both allow you do send crypto without verification.
- Dr. Darwin.
On exchanges, you can't buy Bitcoin anonymously without SSN or ID verification but basically you can buy Bitcoin without verifying your identity or SSN.
How do I buy Bitcoins on Cashapp without SSN? ›
How Can I Use a Cash App without SSN?
- Download the app and create an account with your email address.
- Connect your debit card information (*more on that below for those who aren't able to open a bank account with a SSN)
- Head over to the Send Money tab and select "I don't have a SSN."
Most crypto ATMs will need a phone number (at a minimum) to verify your identity, but some may require further verification, such as scanning a photo ID or entering your Social Security number. Scan your wallet. To buy Bitcoin or another cryptocurrency, you will need to scan your wallet address.
