Are non-KYC cryptocurrency exchanges as safe as their KYC-compliant counterparts?

When trading on non-KYC platforms, monitoring the platform’s track record and the people running it becomes critical.

Blockchain records everything.

While the suits that support traditional finance portray cryptocurrencies as a tool for money laundering, criminal cryptocurrency transactions have continuously decreased year over year. Despite the ease with which cryptocurrencies can be used without KYC authentication, a Chainalysis investigation found that only 0.15% of all crypto transactions in 2021 were associated with illegal activities.

Furthermore, irreversible blockchain records enable authorities to backtrack transaction owners, discouraging illicit actors from using crypto — both KYC and non-KYC platforms — to support their behaviors.

Because of the permanent nature of blockchain, authorities all around the world have been able to track down scammers, fraudsters, and launderers of crimes done years ago.

Neither your keys nor your coins

One of the most serious problems when dealing with cryptocurrency exchanges is a loss of control over the assets. Cryptocurrencies kept on crypto exchanges require the exchange to receive the private keys.

Using unvetted crypto exchanges that advertise no KYC requirements exposes investors to the possibility of losing their assets indefinitely. While both types of exchanges involve investors to hand over their crypto assets to third parties, KYC-compliant exchanges create higher trust among investors and authorities.

Understanding the distinctions described above will help you answer the question “Are non-KYC crypto exchanges safe?” Whether they use KYC or not, crypto investors are equally subject to external dangers such as the owner’s intent and unethical business practices, in addition to receiving no government support.

Furthermore, investing with a non-KYC crypto exchange has limitations in terms of trading value, available tokens, and other services provided by the provider.