Many users feel frustrated upon discovering they must complete identity verification to sign up for a crypto exchange. I shared this frustration—I didn't want platforms accessing my personal details or subjecting me to facial recognition. Isn't cryptocurrency meant to be untraceable? Why is identity verification required just to buy crypto? And if I withdraw from a verified account, doesn't that make me traceable?

I've even encountered ransomware cases where hackers shared their BTC wallets to evade tracking.

This raises questions: If I complete KYC on an exchange and trade Bitcoin, is my personal information exposed? I'm forced to link my phone number, ID, and even a Google email. Could the platform sell my identity? These are common concerns—many of us distrust why such data is collected and fear it might be sold afterward. So, what options do we have?

Why Do Crypto Exchanges Require KYC?

This section explores why crypto platforms enforce identity verification. Do they sell your information after KYC? Let's begin with real-world examples.

HSBC and Standard Chartered faced massive fines for inadequate anti-money laundering (AML) measures. HSBC was penalized $1.9 billion after Mexican and Colombian drug cartels laundered money through the bank. They were also accused of aiding terrorist groups and enabling sanctioned nations like North Korea and Iran to open accounts and transact.

Standard Chartered incurred a $132 million fine from UK regulators for similar AML failures, allowing criminal groups to launder up to $265 billion.

In traditional finance, AML and KYC are non-negotiable. Banks ignoring AML duties face hefty fines from regulators. That's the system—earning in this space requires accepting responsibility.

As exchanges bridge crypto and fiat worlds, criminal organizations, drug cartels, and money launderers could exploit them. Thus, exchanges must comply with AML laws.

From a platform's view, skipping phone verification or KYC risks unidentified illegal activities. This could lead to legal liability and fines. Dirty money from crime or gambling is toxic—exchanges avoid it at all costs. That's why KYC is mandatory for all users.

Will Crypto Exchanges Leak Your Identity?

Simply put, exchanges typically don't leak your data intentionally—it would devastate their business.

Crypto exchanges rely on trust. Without user confidence, trading halts. Platforms aim for longevity and reputation. Consider this case:

Upbit, South Korea's largest exchange, faced investigations for failing to verify 500,000–600,000 accounts. This severely damaged public and regulatory trust.

Commercially, no exchange wants data leaks—one incident could ruin their reputation and drive users away. However, other parties might attempt to steal your info:

Mobile carriers could access SMS messages. If you bind your number to an exchange and they monitor texts, they might identify your platform and potentially sell your number.
Free VPNs often have hidden backdoors. Using one could expose all device traffic, including exchange data, for sale.

As a crypto user, safeguarding online security is vital. This explains why top platforms enforce identity verification and pursue compliance.

For example:

OKX secured Dubai's first license and one in Singapore.
Binance obtained a license in Dubai.
Bitget invested in OSL Group, licensed in Hong Kong.
Bybit acquired licenses in Dubai and the Netherlands.

These exchanges are advancing toward full compliance. Unlike inexpensive U.S. MSB licenses (costing about $20,000 and easily acquired), these are rigorous regulatory licenses demanding full legal adherence and due diligence.

If you haven't registered for OKX or Binance yet, now is an ideal time:

1. OKX or Backup Link

Asset size: $17.1 billion (slightly up from 2024, reflecting market growth)
Trading pairs: 620 (25 new additions, including trending tokens)
24h volume: $16.05 billion (boosted by global user growth)
Highlight: Operated by OKEX Technology Co., OKX received early investment from Tim Draper, the legendary VC behind Hotmail, Baidu, and Tesla. In 2025, OKX remains a top global exchange, especially dominant in Asia.

2. Binance

Asset size: $12.85 billion (growing steadily)
Trading pairs: 780 (38 new pairs, keeping pace with market trends)
24h volume: $19.025 billion (new record highs)
Highlight: Founded by CZ (Changpeng Zhao), Binance dominates the crypto exchange scene in 2025 with over 150 million users. Despite regulatory hurdles, its top-tier tech and UX maintain its lead. Chinese users can register via email and access with a VPN.

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Why KYC is Required for Crypto Exchange Registration