Many users feel a strong aversion when they find out that they must complete identity verification when registering for a cryptocurrency exchange. Including myself, I do not want trading platforms to have my identity information—why should I undergo facial recognition? Wasn't cryptocurrency once touted as untraceable? Why is real-name verification required to buy coins on exchanges? Once I withdraw coins from a verified exchange, I will definitely be tracked. I have also heard about some ransomware that even publicly displays Bitcoin wallets to prevent law enforcement from tracing them.
Now, if I buy and sell Bitcoin on an exchange through real-name verification, will my identity information be leaked? During registration, I have to bind my phone number and ID card, and also use a Google email; will the trading platform leak our identities? These questions undoubtedly trouble everyone: we question their purpose for collecting identities and are more concerned that they will sell this information after collecting it. What should we do?
Why do cryptocurrency exchanges require KYC for real-name verification?#
This article will explain why cryptocurrency trading platforms require real-name verification. After real-name verification, will these exchanges actively sell information? First, let's look at a few cases.
HSBC and Standard Chartered Bank have both been fined heavily for insufficient anti-money laundering measures. HSBC was fined $1.9 billion because drug lords in Mexico and Colombia used it for money laundering; the bank even served terrorist organizations and allowed blacklisted countries like North Korea and Iran to open accounts for trading.
Standard Chartered Bank was also fined $132 million by the UK Financial Conduct Authority for failing to implement sufficient anti-money laundering measures, which allowed criminal groups to launder $265 billion. In traditional financial institutions, anti-money laundering and identity verification are mandatory requirements; otherwise, they face heavy penalties. Holding a banking license but failing to fulfill anti-money laundering obligations must be punished by regulators—this is a global rule: if you earn this money, you must bear this responsibility.
Current exchanges can also connect to the fiat currency world, meaning that criminal systems, money laundering networks, and drug trafficking may use exchanges for money laundering. Therefore, exchanges must comply with the AML anti-money laundering system. If they do not comply, exchanges will bear criminal liability. From the perspective of exchanges, if they do not implement strict KYC and phone number verification, once something goes wrong, failing to provide personal information or phone numbers for criminal accounts when law enforcement requests it will lead to hefty fines. Exchanges avoid criminal groups and gambling dirty money—these funds are like flies, only bringing disaster. Therefore, exchanges require all customers to complete identity verification.
Will cryptocurrency exchanges leak identity information?#
Exchanges typically do not actively leak personal information because it is not worth the risk. Essentially, cryptocurrency exchanges are platforms that accumulate trust; if they are untrustworthy or unsafe, users will leave. Therefore, they place a high value on reputation and strive to become century-old establishments. For example:
South Korea's largest exchange, Upbit, was investigated for failing to implement strict identity verification on 500,000 to 600,000 accounts. After the incident, the trust of regulators and the public in exchanges significantly declined. From their own interests, exchanges will not actively leak customer identities—once leaked, their reputation will be damaged, and users will leave. However, just because exchanges do not actively leak does not mean others will not steal.
- Local operators can detect SMS messages: If you bind your phone number to the exchange, the operator can detect the content of the SMS and know you are a user of that exchange, potentially selling your phone number.
- Using malicious free VPNs is risky: These VPNs often have backdoors, and their free nature is to steal real-time data; once used, all transmitted data will be monitored by the VPN, and information may be sold.
Therefore, as users of cryptocurrency exchanges, we need to pay more attention to cybersecurity. This explains why commonly used trading platforms must require identity verification. These platforms have made efforts in compliance: for example, OKX has obtained the first license in Dubai and a license in Singapore; Binance has also obtained a license in Dubai; Bitget has invested in the OSL Group (which holds a Hong Kong license); and Bybit has obtained licenses in Dubai and the Netherlands.
Each exchange is moving towards compliant operations. I am willing to use platforms that have applied for licenses in specific regions globally, rather than those that only hold a US MSB license (which can be purchased for just $20,000). The licenses of the aforementioned exchanges cannot be bought with money; they must genuinely meet local compliance requirements to obtain them.
If you have not yet registered for an OKX or Binance account, it is recommended to register one first—
1. OKX or Alternative Link#
- Asset Scale: $17.1 billion (slightly increased in 2024, reflecting market expansion)
- Number of Trading Pairs: 620 (added 25, covering more emerging coins)
- 24-hour Trading Volume: $16.05 billion (benefiting from global user growth)
- Highlights: OKX is operated by OKEX Technology Company Limited, which received early angel investment of millions from Tim Draper. This legendary investor has previously bet on Hotmail, Baidu, and Tesla. In 2025, OKX will remain among the top global trading platforms with services in spot, futures, DeFi, etc., especially performing strongly in the Asian market.
2. Binance#
- Asset Scale: $12.85 billion (continuously growing, consolidating its leading position)
- Number of Trading Pairs: 780 (added 38, keeping up with market trends)
- 24-hour Trading Volume: $19.025 billion (trading volume hitting new highs)
- Highlights: Founded by Changpeng Zhao (CZ), Binance remains a "giant" in global cryptocurrency trading in 2025. Despite facing scrutiny due to regulatory pressures, Binance attracts over 150 million users with top-notch technology and user experience. Domestic users need to register via email and use a VPN, but it remains the preferred platform.
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