Debunking KYC – What Is It, Is It Needed?
What is KYC and why do I need it when I buy bitcoin?
We got you, know your customer (KYC) is not a very sexy topic. However, we experienced a lot of misleading information about this topic and wanted to bring some clarity to it. Facts instead of rumors is our guiding principle.
In the following article we explain what KYC is, why we are obliged to do KYC and if all registered companies operating in Europe need to know their customers. We kept it short. Promised. Let’s dive in.
Quick Note: When you buy bitcoin from a registered exchange in Europe, that platform knows who you are, either through a separate KYC procedure (European Union) or at least through the banking details (IBAN) from which you make the bank transfer (Switzerland).
What is KYC?
KYC, or “know your customer”, is a set of procedures for verifying a customer’s identity before or while doing business with them. It is a standard due diligence process by financial institutions and other financial services companies to assess and monitor customer risk and verify a customer’s identity. Usually, the process consists of gathering personal data, uploading a document, and answering some questions about the customer’s financial situation.
Why KYC?
KYC regulations are in place to prevent money laundering, terrorism financing, and identity theft. Compliance with KYC regulations is mandatory for all financial institutions legally registered in the European Union. Non-compliance with KYC can incur heavy penalties and lead to lose of registration.
Different KYC methods?
KYC can be established differently and may also vary from country to country. In the European Union, financial service providers are obliged to have a KYC procedure implemented before buying cryptocurrencies. In Switzerland, although there is usually no separate KYC process, data from your bank account (name, address, IBAN, etc.) that you use to buy bitcoin is passed on to the platform. Therefore, you cannot buy bitcoin that are not attached to your identity from a service provider based in the European Union or Switzerland.
Is it possible to buy non-KYC Bitcoin?
If you want to buy non-KYC Bitcoin, your best options are P2P platforms like Bisq or HodlHodl and mining bitcoin yourself. However, P2P platforms are typically not as convenient as regulated platforms, and you always have to find someone who takes your order. Everything in life has pros and cons, and you have to decide for yourself what is important to you.
21bitcoin & KYC?
In order to comply with the legal requirements, as a service provider for virtual currencies, we are obliged to obtain a minimum of information from our users. Meeting the legal requirements also creates legal certainty for us, and only in this way, it is possible to offer our service safely and reliably in Europe. So yes, as a fully registered company in Austria, we have to know our customers. However, we at 21bitcoin made the KYC process as simple and as easy as possible, just asking the questions we are absolutely obliged to ask. It takes no more than five minutes to register AND make your first bitcoin purchase. Most importantly, we treat your data with the utmost care. Check out our Privacy Policy for further information.
We at 21bitcoin are a Bitcoin-only company. Our capital are our customers. From our point of view, bitcoin is the only cryptocurrency that is future-proof, and that’s why we don’t sell anything else. Our mission is to get bitcoin into the hands of people, in a secure, cost-effective and simple way. We are a professional and fully regulated financial service provider in the European Union, built directly on top of the future monetary asset. We are 21bitcoin.
