Are you a US resident looking for a way to buy, sell, and trade cryptocurrencies without having to go through the daunting and stringent process of Know Your Customer (KYC) requirements?
While regulators all over the world are looking at ways to bring the crypto market under their noses, there are still some exchanges that allow users to trade assets without having to share their personally identifiable information.
In this guide, we have listed the three popular exchanges in the US that allow users to trade crypto with no KYC.
What is KYC?
KYC, or Know Your Customer, is a process used by financial platforms, including cryptocurrency exchanges, to verify the identity of their customers. The procedure is essential for these platforms to comply with Anti-Money Laundering (AML) regulations and helps mitigate risks associated with fraud, money laundering, and terrorist financing.
The process involves collecting personal information such as name, address, date of birth, and government-issued identification. By verifying these information, exchanges can assess the risk level of their customers and apply appropriate measures based on their risk profile.
Many jurisdictions require crypto companies to implement KYC procedures to comply with local laws and regulations, thereby avoiding legal repercussions.
Non-KYC Exchanges In the US
1. Uniswap
Founded in 2018, Uniswap is an Ethereum-based non-KYC decentralized exchange, otherwise known as DEX. It has grown to become one of the largest platforms in the world for supporting trades for over 40,000 ERC-20 tokens across 10 blockchains including Arbitrum, Polygon, and Optimism, without requiring any ID.
Uniswap utilizes an automated market maker (AMM) system that facilitates trades without needing a traditional order book. All trades are executed against a liquidity pool that contains the specific cryptocurrency users are looking to trade.
The exchange provides a wide range of non-KYC trading options and its AMM model ensures liquidity for all listed token pairs. Users can also make an income by providing liquidity to Uniswap’s various token pools and earn its native UNI token.
Pros
- Non-custodial exchange where users have full control over their funds
- No KYC or ID is required for commencing trade
- The platform can be accessed through Web3 wallets
- Supports Apple Pay, Google Pay, and credit/debit cards for crypto purchases
Cons
- Charges high gas fees when the Ethereum blockchain suffers congestion
- Chances for impermanent losses when providing liquidity to token pools
- Not suitable for large trades due to slippage
2. Pancakeswap
Pancakeswap is another popular decentralized exchange that is deployed on the Binance Smart Chain (BSC). It is also compatible with the Ethereum Virtual Machine (EVM), allowing users to port over ERC-20 tokens from Ethereum. Most notably, the platform operates without requiring users to provide any ID or KYC, facilitating a high degree of privacy.
Similar to Uniswap, Pancakeswap also employs an automated market marker (AMM) system that enables token swaps by ensuring liquidity and efficient trading without the need for traditional order books. It also boasts a wide range of services, including token exchanges, yield farming and staking. Users can provide liquidity to token pools and earn LP tokens in return, which can be staked to be rewarded with the platform’s native CAKE token.
The DEX supports trading for a wide array of BEP-20 standard tokens, with over 3,000 trading pairs on offer. Pancakeswap also features an NFT marketplace, where users can buy, sell, and trade digital collectibles.
Pros
- Pancakeswap is cheaper to operate because the BNB chain charges less gas than Ethereum
- Provides various avenues to earn and grow users’ cryptocurrency holdings
- There is minimal price slippage due to efficient trading mechanism
- The platform is easy to operate and is suitable for both experienced and beginner traders and holders
Cons
- Offers no advanced features like leveraged trading
- Users can experience heavy losses due to price fluctuations when providing liquidity to token pools
- There is risk associated with potential vulnerabilities in smart contracts
3. SushiSwap
SushiSwap is yet another DEX operating on the Ethereum blockchain that allows users to trade cryptocurrencies without the need for a centralized authority. The exchange functions using an automated market maker (AMM) model that utilizes liquidity pools to facilitate trades. The platform is a fork of Uniswap and is for most parts similar to its parent exchange.
Unlike centralized exchanges, SushiSwap does not hold users’ funds and instead enables peer-to-peer token swaps that are handled by smart contracts. Users can also provide liquidity to the exchange by depositing tokens into liquidity pools and earn a portion of the transaction fee or the platform’s native SUSHI token as rewards.
It is reported that SushiSwap supports over 11,000 token pairs across multiple blockchains, including Bitcoin, Ethereum, Litecoin, Ripple, and Stellar Lumens among many others. Additionally, the platform has a cross-chain functionality through which users can swap assets seamlessly across different blockchains.
Pros
- SushiSwap has a beginner-friendly interface that makes it accessible to new users while still catering to experienced traders.
- It is one of the world’s largest DEXs in terms of the number of cryptocurrencies and blockchains it supports.
- The exchange’s advanced cross-chain functionality enables users to swap tokens across multiple blockchains with a single click, enhancing versatility.
Cons
- There is a case of the exchange facing liquidity challenges when dealing with less popular cryptocurrencies, impacting the trading efficiency of those tokens.
- Users can encounter high gas fees, especially during times when the Ethereum blockchain is facing a congestion issue.
- SushiSwap primarily supports Ethereum-based tokens, so those who are looking to trade assets from other blockchains may have to use wrapped versions or seek alternate exchanges.
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