Camila Johnson
KYC (Know Your Customer) processes have been known and practiced worldwide. It was essential for certain regulations emphasizing the financial sector, primarily to prevent fraud, money laundering, and other illegal activities. However, with the development of cryptocurrencies and the arrival of money decentralization, the NO-KYC revolution arrived. Digital anonymity is becoming more sought after and various people and businesses are quite into it.
Businesses that accepted NO-KYC
Many businesses accepted this approach and it is not surprising that these are the ones that support user privacy and anonymity. One of the most popular groups in this sector is casinos. Their customers often worry about their anonymity, therefore, this is a great basis for the growth of the new movement. One can easily find the list of some of the best KYC-free casinos and enjoy playing completely free of any worry. Other businesses supporting NO-KYC include cryptocurrency exchanges, which makes sense given that cryptocurrencies are one of the symbols of decentralization. There are also privacy-focused payment systems such as Wasabi and Samurai Wallet. Both are Bitcoin wallets that prioritize the anonymity of their users. Privacy coins are also becoming bigger recently. Monero and Zcash are examples of coins that make their transactions virtually untraceable. Moreover, no ID verification casino places often cooperate with privacy coins, which means that people who are invested in the whole NO-KYC method, can have it all in one place.
Some other domains that can be KYC-free are VPN services and some email services that allow usage without personal identification. The email service is called Tutanota. There is also Bitrefill that enables users to buy gift cards without leaving any of their personal information.
Privacy and anonymity
The key point of No-KYC lies in the privacy of user data. With the rapid development of technology, people are becoming more skirmish about sharing their data. Therefore, it is not a surprise that many would like to keep their data and their identities to themselves, especially when it comes to payment. Luckily, with cryptocurrencies, we can experience decentralized payment methods where no identity revelation is needed. As we already mentioned, privacy coins are designed especially in the way to support No-KYC, i.e. these models work on the principle of peer-to-peer transactions where it is almost impossible to have intermediaries. Hence, there is no need for identification in the case of these transactions.
How does regulation work?
One can only imagine how challenging it could be to balance compliance with regulations and preserving user privacy. Some regulatory bodies require KYC which directly compromises user privacy and anonymity. On the other hand, the laws and regulations require KYC for safety purposes – to avoid money laundering, fraud, etc.
Moreover, different countries have different KYC regulations depending on the jurisdiction and it is sometimes extremely difficult to comply with all the rules and not jeopardize privacy.
Technological advancements
Nowadays, certain tools help improve the No-KYC principle. One of them is the Zero-Knowledge Proof. This is a cryptographic system that enables users to become trustworthy without revealing any of the data. It is complete in the sense that it convinces the other party of the first party’s knowledge of the value without actually displaying the value. The most important factor here is the fact that this method enables compliance with certain anti-money laundering regulations without endangering the personal data of users.
There are also identity verification processes that aid users by giving them more control over their data while complying with KYC regulations.
How does it affect the economy?
The No-KYC platforms can provide access to their services more easily, even for areas where KYC services are unavailable, so this provides more coverage making the economic aspect positive. On the other hand, by eliminating KYC, there is also a reduction of costs related to it. This is reflected in lower fees for users, making everyone happy.
Safety concerns
One of the main issues when it comes to No-KYC is trust, more precisely, the risk of fraud. KYC was implemented to eliminate or at least minimize this risk. While No-KYC methods bring more control and privacy to users, it seems that they also bring more risk. The facilitation of illegal activities is a primary concern of No-KYC objectors, some of which include fraud, terrorism funding, and money laundering.
Identity verification is also extremely important. Failure to conduct proper identity verification introduces many risks for fraudulent activities such as identity theft and many possible illegal activities that follow.
However, nowadays there are great tools that alleviate these concerns. As already mentioned, some systems provide legitimate identity verification without exposing the identity of users. Moreover, the zero-knowledge proof system also elevates trust between users without compromising their private data. These systems are already improved and they will only keep getting better, so there does not seem to be a reason for skepticism towards No-KYC methods.
