How to Buy Cryptocurrency with Privacy

The common misconception with cryptocurrencies like Bitcoin and Ethereum is that they are fully anonymous and therefore impossible to link back to an individual. 

However, that’s not true. 

With a little sleuthing using publicly-available tools or full-fledged blockchain analytics solutions, it is possible to associate payments made in cryptocurrencies back to real-life individuals.

The main reason being is that whenever you buy or sell crypto using fiat as an on-ramp, you typically have to provide personally-identifiable information due to existing financial regulations. That also means your data is one data breach or security incident away from getting into the wrong hands. 

Nevertheless, there are still ways to buy cryptocurrency with the highest degree of privacy in 2024. We’ll lay them out for you in this article so you can preserve your on-chain privacy each time you interact with cryptocurrencies and the blockchain. 

KYC/AML and your personally-identifiable information

The “Wild West” days of crypto are over as wider adoption goes hand-in-hand with increasing regulation. Most major centralized crypto exchange platforms have implemented stringent know-your-customer (KYC), anti-money laundering (AML), and anti-terrorism financing (AFT) compliance controls, which is the price of entry into buying into cryptocurrencies using conventional methods. 

If you’ve had any previous experience with buying crypto through Binance or Coinbase, then you will be familiar with how the all leading crypto exchanges collect personally-identifiable information such as full names, dates of birth, residential addresses, and government-issued IDs. These companies store the information in online databases where transactions are tracked for suspicious activity, with said exchanges reporting any hits to the relevant governmental authorities. 

While the purpose of such processes and regulations is to prevent financial crimes, they leave crypto investors vulnerable to data breaches, leaks, and security incidents that could compromise their crypto assets and lead to identity theft.

Crypto and the concept of pseudonymity 

The full transparency provided by blockchain technology is one of its greatest advantages. The open, public, and transparent ledger means that every single confirmed transaction is etched into the blockchain for anyone and everyone to see—forever. 

However, pseudonymity isn’t synonymous with anonymity. While cryptocurrency addresses cannot be directly linked to their beneficial owner’s real-life identities per se, they can be linked to individuals through the KYC procedures that centralized exchanges implement in the event of a data breach.

That’s what makes the interest surrounding buying cryptocurrency with privacy even more relevant in the present year—particularly for investors who wish to keep their crypto transactions discreet. Private crypto purchases allow investors to buy their desired crypto without needing to show al their assets to the general public. . 

To do so, you would need to either buy directly from an exchange or seller that doesn’t require KYC and accepts payment methods that leave no audit trail, such as cash, prepaid debit cards, or cash by mail, as an instance. Read on to find out how and where to buy crypto privately.

Where to buy Crypto Privately 

Peer-to-peer (P2P) crypto marketplaces

P2P marketplaces have long been a mainstay in the crypto world for investors who wish to stay private. 

Such platforms enable buyers and sellers to connect directly with one another to perform P2P transactions and pay in a variety of methods—including cash, gift cards, or prepaid cards that reduce the paper trail. 

While the forerunners of P2P marketplaces like LocalBitcoins and LocalMonero, for instance, have closed doors in 2024, options like Bisq and Paxful still remain. 

Crypto ATMs

No-KYC crypto ATMs allow users to buy Bitcoin and other available cryptocurrencies for cash. While the number of no-KYC ATMs are fast dwindling due to increasing regulations, there are definitely still a handful of non-KYC ATMs in select locations worldwide. 

Try coin ATM location services to find the closest one in your area and double-check their terms and conditions to confirm whether they require KYC or otherwise.

Buying crypto and paying by cash through mail

Certain crypto communities such as BitQuick enable members to arrange P2P trades and facilitate buyer payments through sending cash by mail to the seller for a 2% fee. 

The platform holds the crypto in escrow until the cash is successfully received by the seller. While this could be a more tedious route, BitQuick is an option for investors who can’t put a price on privacy. 

Privacy-centric crypto swapping protocols

The most sensible way to buy crypto with complete and total privacy is to buy crypto anonymously using one of the above methods and run it through a private swap platform like Houdini Swap. 

Houdini Swap, for instance, allows users to send, swap, bridge, or convert their crypto to any of its 4,000 supported tokens without leaving their source and destination addresses on-chain. Even if you buy crypto such as stablecoins using a centralized KYC platform, you will be able to use Houdini Swap to keep your crypto address secure and private once you’ve swapped to your desired crypto using it.

The drawbacks of existing privacy solutions

Prior to the arrival of Houdini Swap, the only ways users can keep their privacy in check was through privacy coins such as Monero, Zcash, or Tornado Cash. 

However, the subsequent crackdown on Tornado Cash after being used as a front for financial crimes saw the US government shut it down, while Monero and Zcash have long been delisted on centralized crypto exchanges, therefore limiting their reach to privacy enthusiasts.

Why Use Houdini Swap?

Houdini Swap is a liquidity aggregator enabling privacy-focused send, swap, and bridge transactions while keeping both sides secure. This allows users to transact with the best possible privacy and near-perfect anonymity. 

The privacy that Houdini Swap affords users protects them from intermediaries tracing the ultimate beneficiaries behind source and destination addresses as well as balances and financial histories—even when they use a centralized exchange as an on-ramp prior to swapping them with Houdini Swap. 

Houdini Swap’s unique dual-exchange architecture uses a randomly-selected L1 blockchain as a privacy tunnel between two non-custodial decentralized exchange partners to keep wallet addresses—and therefore the risk of being linked to real-life identities—-beyond visibility. 

No other swap platform offers as much of a high degree of fully-compliant transactional privacy than Houdini Swap, making it THE ideal choice for privacy-centric users.