If you are a crypto investor from India and use centralized exchanges like WazirX, Coinswitch, CoinDCX, or Bitbns, you must know about their KYC protocols. On making an account, users first need to do complete verification with their ids to start using the platform. While this isn’t a bad thing per se for those who are okay with it, these exchanges are violating user privacy and sharing data with the government. Many Crypto Investors got notices from the government after these CEXs shared their data transactional data.
The problem with Indian CEXs
Recently, a Reddit user by the name Set1Less posted about the centralized Indian exchanges violating users’ privacy. The user also shared images of the notices that users have received from the government. Investors are being asked to show evidence from their bank accounts for several years. The problem here is that crypto isn’t illegal in India and therefore, the government enquiring without any reason is not acceptable. But the bigger problem is the exchanges sharing user data without their approval.
We all have heard that without warrants, people cannot be searched. However, the government and these CEXs are still involved in these unethical practices. If the government suspects something, the CEX still should not share everyone’s data.
Solution
It’s quite simple do not use centralized Crypto Exchnages if these privacy issues worry you to the core. There are a lot of DeFi applications like Uniswap, dyDx, and Pankcakeswap, which do not need any KYC to begin with. The authorities cannot demand any data from these platforms as they are not run by anyone and are just a piece of code. So, all in all, your data will be safe. And for storing cryptocurrencies, use a private software or hardware wallet.
If you don’t want to use DeFi because of the high fees, Binance’s P2P feature is good, to begin with. The exchange will at least offer better privacy than the centralized Indian exchnages. Some other options are FTX, kuCoin, and Kraken.
What are your thoughts as Crypto Investors get notices from the government after Indian CEXs share their data? And do you think it’s high time to shift to DEXs? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
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