Andrey

Hacker Noon Investor

Privacy in Crypto is Under Siege, We Need More Solutions to Protect Us

Despite the crypto market is quite small, cryptocurrency assets are closely being watched by governments across the globe. The issue is that central banks view virtual assets like Bitcoin and the rest as a threat to their dominance over global finance. 
Cryptocurrencies are censorship-resistant, unlike the likes of PayPal, and they are available for people across the globe regardless of their identity or social-economic background.
Over the short period, these virtual assets have existed, their popularity has surged partly due to their ability to offer people a way to escape the government oversight that is exercised over traditional financial systems.
However, this is about to change as the Financial Action Task Force (FATF), which is a multi government organization is set to issue new rules for nations on how they will handle cryptocurrencies.
The organization is tasked with developing recommendations for member nations on how to combat money laundering and financing of terrorism. More than 200 countries follow the organization.
The new rules will target businesses that work with cryptocurrencies and tokens e.g., crypto exchanges, hedge funds, and custodians.
According to Eric Turner, the director of research at Messari Inc., much will depend on how the rules will be interpreted and applied by different regulators in different countries. However, the regulations represent “One of the biggest threats to crypto today. Their recommendation could have a much larger impact than the SEC or any other regulator has had to date.”
The ridiculous thing about these guidelines is that they will require crypto companies including the likes of exchanges and hedge funds to collect information on customers that will be conducting transactions of over $1,000 or €1,000 including the recipients of the funds. They will also be required to send that data to the service provider of the recipient along with each transaction.

Implications Of The New Rules On Crypto Exchanges

Typically, most exchanges conduct Know Your Customer (KYC), Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) procedures to discourage illegal transactions and improve account/wallet security.
KYC is used to verify the identity of the customer, while AML is used to combat income generated through illegal activities and CFT involves procedures that investigate, dissect, discourage and block sources of funding that are meant for activities that realize religious, political or ideological goals through violence or its threat against civilians.
As if that isn’t enough breach of individual privacy, the additional rules by the FATF could have dire consequences for exchanges. First, the compliance cost will go off the roof since implementing such a system won’t come cheaply. Secondly, they stand to lose customers as most of their clients instead of going through these exchanges while opt to start trading directly with each other to safeguard their privacy.  
While some of the biggest exchanges are discussing how they are going to implement the new system, there are a few other projects that have chosen to protect the privacy of their customers. Below we are going to take a look at four crypto exchanges that require less personal information for one to get started.

6 Crypto Projects That Preserve Customer Privacy

1. Bitfoliex

This platform requires users to register with only an email address, and they can get started which allows for anonymity. The exchange has managed to record over 866,000 verified users within a short period of existence. It also offers a multi-signature wallet backed up by 2FA to guarantee security.

2. Revix

Crypto investment platform. They use the combination of password protection, multi-factor authentication, digital encryption, and remote storage to protect users’ data. The company offers users the chance to control their own cryptocurrency portfolio without having to involve financial experts. The platform gives users the way to invest in cryptocurrencies through crypto bundles which allow users to own a diversified portfolio that consists of the world’s top crypto coins.

3. Marshal Lion Group

The consulting company that uses blockchain to eliminate intermediaries and other bureaucratic structures. Removing any intermediate barrier is essential to protect information from leakage. Thus, personal information of lenders and investors remains under protection.

4. BitQuick

This platform doesn’t require any verification for users to buy or sell Bitcoins. Matter of fact, users don’t even require to open an account to make a trade. All they need is to enter an external wallet address and then provide an email.
However, on the platform, sellers have to fill a form that will ask for some information about them, but they are not required to provide any personal documents.

5. StealtheX

The platform doesn’t require any registration for customers to get started and doesn’t share any customer information with third parties.
The platform offers limitless swaps with over 250+ coins supported. The StealtheX system is integrated on different crypto trading platforms, including the likes of Binance, Bitfinex, and HitBTC. Also, the platform boasts other exchange partners that allow it to offer the most profitable coin rates.

6. PrimeXBT

This is another new trading platform that doesn’t require KYC and advertises it as one of its features. The exchange allows users to trade in many popular crypto coins, including the likes of Bitcoin, Ethereum, Ripple, Litecoin, EOS, and many more. It’s also involved with other markets like Gold, Silver, Nasdaq and crude oil as well as many foreign currencies like the USD, GBP, AUD, EUR, CHF, JPY and many more.

Final thoughts

Even though opinion on crypto regulation is divided among various camps, some believe the upcoming FATF regulations are necessary if crypto is to go mainstream. However, for the users that still prefer to conduct their business anonymously, they can look up to the six projects above and many more that are coming up which strive to preserve their privacy.
Disclaimer: I do not have any vested interest in any of the mentioned projects. The views and opinions expressed are those of the author and is not investment advice. Trading of any form involves risk. Do your research.

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