All of us are afraid of losing money due to hacks, scams, our own mistakes or even bad decisions (buying useless shitcoins, selling coins too late or too early, etc). Most topics cover issues such as these. But when it comes to losses, you should be aware that there’s more than money which can be lost. By this, I’m talking about identity theft of personal data of any kind. Protecting this data and paying attention to privacy should have at least the same priority of protecting your money. After all, money is replaceable; it’s "only" a financial loss. Once identity is stolen, however, there is no chance of its undoing.

This is where the issue begins. One of the best ways to protect yourself from identity theft is to understand the false assumptions of KYC. Some crypto services require its users to undergo a so-called “KYC” nowadays. KYC means “know your customer” and forces users to send personal documents to a company or organization. This is already becoming a problematic issue that some companies are very strict and will not allow you to use their services, even if you just want to purchase crypto worth only a few hundred dollars.

The official purpose of KYC should be to prevent money laundering (known as AML, anti-money laundering) and terrorist financing. Strict KYC and AML were mainly introduced by the US after 9/11 and many countries are guided by the SEC in setting KYC as a requirement. AML existed before but only for institutions and big amounts of money. Average customers were affected only after restrictions introduced by the SEC.
At first glance, KYC sounds good for shutting down criminal activities. Unfortunately, this looks very different in reality. KYC in crypto doesn’t necessarily help to stop money laundering or reduce criminal activity; nor does it help to prevent terrorist financing. On the contrary - KYC endangers our privacy and encourages criminal activities (via KYC scams, identity theft and other means).

[—long, thoughtful post—]