Step-by-step instructions on how to buy bitcoin and other cryptos anonymously.
As lawmakers in Canada and around the world gradually introduce tighter regulations on cryptocurrency trading, it’s becoming more difficult to buy crypto without ID.
However, if you don’t have suitable proof of ID or if you simply value your privacy, there are still some sites where you can buy cryptocurrency without completing a verification process.
Keep reading to find out how.
Buy bitcoin without ID verification on these exchanges
Some exchanges have different thresholds for verification requirements. For example:
- Paxful does not require ID verification for account creation, but requires verification for accounts that reach the equivalent of US$1,500 in trade volume or wallet activity.
- Binance and Kucoin only offer crypto-to-crypto trading, but neither requires ID for trading and both offer withdrawal limits of 2 BTC per 24 hours without verification.
Quick guide to buying bitcoin without ID
- Register for an account on a P2P bitcoin marketplace.
- Search the list of open offers for sellers that accept in-person cash payments.
- Find a seller close to you.
- Check the seller’s reputation on the platform.
- Agree on a price.
- Arrange a time to meet somewhere public.
- Complete your transaction.
Three ways to buy cryptocurrency anonymously
If you want to buy cryptocurrency without ID verification, there are only a few options to choose from:
Why is it difficult to buy crypto without ID?
There’s a widespread misconception that cryptocurrencies are simple to purchase anonymously, but this simply isn’t true for a couple of reasons:
Regulators around the world are gradually introducing legislation that governs digital currency exchanges and the buying and selling of cryptocurrencies. These laws regularly include a requirement for exchange operators to identify their customers in line with Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regulations. As a result of this legislation, many exchanges will now require you to provide proof of ID before you can start trading.
Bitcoin is pseudonymous, not anonymous
Because it’s possible for bitcoin users to send and receive BTC to one another without providing proof of ID, the currency is sometimes described as being anonymous. However, a more accurate way to refer to bitcoin is as a pseudonymous currency.
One commonly repeated comparison likens transacting with bitcoin to an author writing under a pseudonym – if their true identity is ever discovered, anything they wrote while using the pseudonym can be linked directly to them.
Your bitcoin address is like an author’s pseudonym, and every BTC transaction you make is stored for all eternity in a public ledger known as the blockchain. So, if your bitcoin address is ever linked to your identity – something cybersecurity researchers say is quite straightforward to do – all your transactions could be traced back to you.
Why might people want to buy crypto without ID?
In the court of public opinion, there’s a widely held belief that the main reason anyone might want to buy cryptocurrency anonymously is so they can pay for all manner of illicit goods and services in the hidden corners of the dark web.
While there’s definitely some truth in this idea – after all, anyone involved in illegal activities would have good reason to want to cover their tracks – there are also plenty of legitimate reasons why someone might want to buy bitcoin or some other crypto without any ID.
- If you’re worried about crypto exchanges being targeted by hackers and your personal information (including your driver’s licence/passport details) being stolen
- If you own a lot of crypto and don’t want to be targeted by thieves
- If you don’t trust the government (this may be less of a concern in Canada, but can be a real issue for people living under authoritarian regimes)
- If you don’t have any ID (an estimated one billion people around the world don’t have proof of identity)
Finally, there’s also the simple fact that the ID verification process on some platforms can be frustratingly slow, particularly during times of increased demand. If you want to purchase crypto as fast as possible to take advantage of an anticipated price change before it occurs, buying without ID verification might be a quicker option.
More ways to protect your privacy
If privacy is important to you, there are several steps you can take to protect your identity when sending and receiving cryptocurrency. These include:
- Using a new address for each transaction. Using a new address for each crypto transaction is a simple way to prevent separate transactions being linked back to you as the common owner. Hierarchical deterministic (HD) wallets like the Ledger Nano S allow you to generate a new address every time you receive bitcoin.
- Using multiple wallets. Another option to increase your anonymity when transacting with crypto is to open and maintain multiple wallets.
- Using a mixing service. Bitcoin mixing services rely on a data anonymization method known as CoinJoin, which basically jumbles payments from multiple users together into a single transaction. This is designed to make it much more difficult for prying eyes to determine who sent money to whom.
- Hiding your IP address. Your IP address is a unique address for your computer that reveals where you’re connecting to the Internet. To prevent it being linked to your cryptocurrency wallet address of transactions, you can consider ways to hide your IP, such as using a VPN service or encrypting and rerouting your Internet traffic through a service like Tor.
- Using a dedicated privacy coin. Coins like Monero and Bytecoin have built-in privacy features designed to provide anonymous transactions.
- Taking simple privacy precautions. Be mindful of your footprint when using the crypto buying methods listed higher up on this page. For example, avoid giving someone your phone number when paying cash for bitcoin on a local exchange.
Pros and cons of buying cryptocurrency without ID
- You can keep your financial information private
- You don’t need to go through a time-consuming ID verification process
- Makes cryptocurrency accessible to the estimated one billion people around the world who don’t have proof of ID
- Can often be more complicated and inconvenient than simply buying with ID on a conventional crypto exchange
- You may need to settle for a higher price
- You can usually only buy a small amount of crypto before being asked to provide ID
- Many cryptocurrencies aren’t actually anonymous, so your transaction could potentially be linked to your identity
- There’s always the risk that your desire to remain anonymous attracts suspicion and unwanted attention
Whatever your reason for wanting to buy crypto without ID, there are several options available. However, each of those methods comes with a varying level of risk and its own pros and cons, and you’ll usually need to pay an additional premium to get the privacy you want. Make sure you research all of your options before deciding on the safest approach.
Disclosure: As of October 2018, the author holds ADA, ICX, IOTA, POWR and XLM.