People love cryptocurrency for many reasons. It is decentralized, it is secure, and it is volatile which means it is great for day trading. One of the biggest reasons people love crypto, though, is that it offers privacy and anonymity.
Unlike dealing in the traditional fiat currency that is heavily monitored by governments and financial institutions, crypto can be used and traded anonymously–a trait many crypto enthusiasts appreciate.
Although blockchain-based crypto is private, that doesn’t mean you will always be anonymous while dealing with the digital currency. Different crypto companies have different policies on how private they will allow you to be while using their crypto products. If you value privacy while interacting with crypto, here are five crypto companies that respect your privacy.
The most popular crypto exchange in the world right now is Coinbase. On this platform, you have to go through a relatively stringent identity verification process so your trades will not be private at all. Two sets of regulations, both strongly encouraged by the US and other countries, bring about these verification processes: know-your-customer (KYC) and anti-money-laundering (AML). These are in place to stop criminals from using crypto anonymously.
Kraken is one of the next most popular crypto exchanges. It offers a little more privacy than Coinbase. Kraken supports three levels of traders: starter, intermediate, and pro. As a starter, you do need to provide a name, email, phone, and address but you aren’t required to give a valid ID, social security number, or a photo like at the other two levels.
As for reporting to the IRS, Kraken will issue a 1099-K to both the trader and the IRS if the trader makes more than 200 transactions or over $20,000 in proceeds. All this means that, although Kraken is not the most private exchange, it does offer slightly more privacy to users than Coinbase if you are thinking about using one of these big sites. This Cove Markets comparison sheds more light on how Kraken stacks up against Coinbase.
Another cryptocurrency exchange that offers users a good deal of privacy is Binance. This trading platform does not require adherence to KYC regulations as long as traders stay under their level 1 verification level of approximately $10,000 in deposits or withdrawals per day or $200,000 per month. These numbers are approximate because the site’s limits are set in Nigerian Naira (NGN) so it depends on the exchange rate.
With level 1 verification, users need to provide a government-issued ID document, a photo, and an email. However, you don’t need a utility bill to verify your address or a bank account number like you do for level 2. Level 3 identification is much more in-depth, involving a Wealth Declaration Form review process. You would only need this level if you are making about $50,000 in deposits or withdrawals a day or over $1,000,000 per month.
3. Monero (XMR)
If you want the most private cryptocurrencies for your holdings, several fit the bill. Monero is a top 15 crypto in overall market value and is exploding in popularity thanks to some of the privacy features it offers traders and users. In 2020, the price of Monero rose from around $45 per unit at the beginning of the year to over $150 at the end.
The privacy Monero offers is in large part thanks to Ring Confidential Transactions, also known as RingCT. This type of transaction is hard to track because it conceals the identity of both the sender and receiver of the transaction as well as the amount of the transaction using stealth addresses and ring signatures.
DASH is another well-known crypto that offers users some interesting privacy features. The coin ended 2020 with a market cap hovering around $1 billion and the coins more than doubled in price throughout the year, starting around $42 and ending the year around $100.
What is interesting about DASH, from a privacy perspective, is that DASH allows you to basically choose your privacy settings. If you want to make a private transaction, you can use what is called PrivateSend. This feature uses a mixing protocol that uses a decentralized network of servers known as master nodes.
Although this will allow you to make a transaction while concealing the point of origin, it will also slightly raise the transaction fee. DASH users who want to stay anonymous through this slightly higher fee, feel that it is well worth the cost.
5. Samourai Wallet
In addition to privacy on exchanges and in the crypto itself, you also want to consider how private your crypto wallet is. One of the most private wallets available today is the Samourai Wallet. You can get this wallet as either a mobile wallet on Android or a desktop wallet on Mac, Windows, or Linux.
The wallet uses two innovative technologies to help keep the transactions to and from your wallet private. STONEWALL technology masks your transaction so that it does not leave a trail of public metadata linking the sender and the receiver. Ricochet is a function you can turn on when you are carrying out a transaction which will add extra hops to your history so centralized that exchanges won’t be able to trace that the transaction came from your wallet.
The Samourai Wallet software is non-custodial which means you have full and complete control of your private keys. The software does not require an email address, ID, or any other type of verification. One of the company’s taglines is “Be your own Swiss Bank” and that perfectly describes this wallet.
Cryptocurrency offers users a certain level of privacy, but for those wanting even more anonymity with digital currency, certain companies do offer more. Kraken and Binance are good exchanges to use for privacy and Monero and Dash are coins that offer anonymous transactions. To store and send your crypto in private, check out the Samourai Wallet. These companies will respect your privacy and let you become an anonymous crypto user.