Many users feel a strong aversion when they discover that identity verification is required upon registering with a cryptocurrency exchange. Including myself, I am unwilling to let trading platforms know my identity information—why should I undergo facial recognition on the platform? Isn't cryptocurrency originally touted for its anonymity and untraceability? Why is real-name authentication still required to purchase tokens on exchanges? If I withdraw funds from a real-name exchange, my transaction records will definitely be tracked. Previously, I heard that some ransomware publicly disclosed Bitcoin wallet addresses to evade law enforcement tracing.
The current question is, if I buy and sell Bitcoin through real-name authentication on an exchange, will my identity information be leaked? Registration requires binding a mobile phone number, ID card, and even using a Google email—will the trading platform leak this data? These questions undoubtedly trouble everyone: we question the purpose of the platform collecting identities and worry that they will sell personal information after collecting it. So, how should we respond?
Why do cryptocurrency exchanges require KYC for real-name authentication?#
This article will analyze why cryptocurrency trading platforms enforce real-name authentication. After real-name authentication, will exchanges actively sell user information? First, let's review a few cases.
Taking HSBC and Standard Chartered Bank as examples, both were fined heavily for insufficient anti-money laundering measures. HSBC was fined $1.9 billion for allowing drug lords in Mexico and Colombia to launder money, even providing services to terrorist organizations, and permitting blacklisted countries like North Korea and Iran to open trading accounts.
Standard Chartered was also fined $132 million by the UK Financial Conduct Authority for failing to implement adequate anti-money laundering measures, which led to criminal groups laundering $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 will inevitably attract regulatory action—this is a globally accepted rule: profit must come with responsibility.
Current exchanges connect to the fiat currency world, and criminal, money laundering, and drug systems may exploit them for laundering, so exchanges must adhere to the AML (anti-money laundering) system. If they do not comply, exchanges will bear criminal liability. From the platform's perspective: if strict KYC and mobile verification are not implemented, once an incident occurs and law enforcement requests information on criminal accounts or mobile numbers, the exchange will face hefty fines. The dirty money of criminal groups and gambling syndicates is like flies attracting trouble, which exchanges want to avoid. Therefore, all customers must complete identity verification.
Will cryptocurrency exchanges leak identity information?#
Exchanges typically do not actively leak personal information, as this would be counterproductive. Essentially, cryptocurrency exchanges are platforms for accumulating trust—if they are not trustworthy or secure, users will leave. Platforms place a high value on their reputation, striving to become century-old establishments. For example:
South Korea's largest exchange, Upbit, was investigated for failing to strictly verify 500,000 to 600,000 accounts. After the incident, trust in the exchange plummeted among regulators and the public. From their own interests, exchanges will not actively leak customer identities; otherwise, damage to their reputation would lead to user loss. However, just because exchanges do not actively leak does not mean others won't steal:
- Local operators may monitor SMS content—if the exchange's mobile number is bound, operators can identify the user and sell the data.
- When using malicious free VPNs, backdoors may be implanted; free services aim to steal real-time data, and once connected, all transmitted information can be intercepted and sold by the VPN.
Therefore, as users of cryptocurrency exchanges, we need to pay more attention to cybersecurity. This explains why trading platforms enforce identity verification. Mainstream 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 licenses in Dubai and the Netherlands.
These platforms operate in a compliant direction. Choosing platforms that have obtained licenses in specific countries or regions is more reliable than those that only hold a U.S. MSB license (which can be purchased for just $20,000). The aforementioned exchange licenses cannot be directly purchased; they must genuinely meet local compliance requirements to be obtained.
If you have not yet registered for an OKX or Binance account, it is recommended to try them first—
1. OKX or alternative link#
- Asset scale: $17.1 billion (slightly increased compared to 2024, reflecting market expansion)
- Number of trading pairs: 620 (25 new, covering more emerging coins)
- 24-hour transaction volume: $16.05 billion (benefiting from global user growth)
- Highlights: OKX is operated by OKEX Technology Company Limited and received early angel investment of millions from Tim Draper. This legendary investor has previously bet on Hotmail, Baidu, and Tesla, showcasing keen insight. In 2025, OKX will maintain a leading position among global trading platforms with various services such as spot, contracts, and DeFi, especially performing strongly in the Asian market.
2. Binance#
- Asset scale: $12.85 billion (continuously growing, solidifying its leading position)
- Number of trading pairs: 780 (38 new, closely following market trends)
- 24-hour transaction volume: $19.025 billion (transaction volume hitting new highs)
- Highlights: Founded by Changpeng Zhao (CZ), Binance remains a "giant" in global cryptocurrency trading in 2025. Despite being under 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, making it still the preferred platform.
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