On October 2, 2019, noncustodial bitcoin wallet Edge began offering fiat exchange features which require no KYC data from users. This privacy-friendly feature is enabled by a partnership with Swiss-based cryptocurrency brokerage firm Bity, which makes use of a proprietary validation technology that is both compliant and convenient.
However, there are two conditions that users must meet in order to benefit from the service: First of all, the user must use the Single Euro Payments Area (SEPA) transfer system, which is only available in 36 European countries; and second, a daily volume limit of 5,000 Swiss francs (approximately $5,000) per user has to be taken into account.
“Bity has a long experience which dates back to 2014 in providing bitcoin exchange services in the Swiss regulated environment,” Bity CEO Alexis Roussel told Bitcoin Magazine. “Swiss law allows for small amounts to be exchanged without mandatory KYC, by providing ownership proof on the receiving address. At Bity, we believe access to KYC-less exchanges, in small amounts, is key to the upcoming mass-adoption.”
Edge’s addition of Bity’s KYC-free service is made through a seamless interface that can be accessed in its “Buy Cryptocurrency” menu. There is no redirect to the website, there is no browser window opening — everything takes place within the UI, and the process is meant to be smooth and straightforward.
There are some premiums that users have to pay whenever they purchase bitcoin with their credit cards. According to CEO Paul Puey, clients get 0.8 percent to 1 percent above the spot rate on exchanges, which he described as “excellent in comparison to the rates offered by competitors.”
The integration of Bity follows a long series of partnerships including Wyre, MoonPay, Simplex, Banxa, Safello and Bits of Gold. Nonetheless, the lack of KYC requirements is a unique feature that may increase the popularity of the Edge wallet in Europe.
Filling the Gap in the European Market
This Edge wallet integration is exclusively for the European market and will fill the gap left by LocalBitcoins’ recent switch to strict KYC requirements while also complementing Hodl Hodl’s liquidity.
In Edge’s efforts to strike a privacy balance, Puey told Bitcoin Magazine that transactions are “private in the sense that Bity can see the public address and may be able to do blockchain analysis afterwards. Other than that, they don’t see any sensitive personal information like a driver’s license, a passport, address or social security number. None of these get sent to them, as they effectively just get your bank transfer. Of course, through that transfer they get the name of the person and the account number, but that’s it.”
Of course, using elements of legacy financial systems come with some inescapable requirements.
“The bank definitely knows the transaction that you’re making, as you make use of a legacy system and there is no way to work around that,” Puey explained. “But from the viewpoint of ‘Are you giving your sensitive personal information to a third party that is not your bank?’ Bity is the best solution which adds a layer of privacy that many other similar services don’t have.”
Puey went on to reiterate the client-side, noncustodial approach to offering Bitcoin services, including how data that Bity may collect from Edge wallet users will be handled.
“We as a company are non-custodial, so we can’t collect emails, phone numbers or any other kinds of user information,” Puey said. “It’s as client-side as it gets, and Bity doesn’t get anything from us and they don’t even need it.”
Given the nature of SEPA transfers and the stricter KYC/AML rules that cannot be circumvented by Swiss laws, U.S. and Canadian citizens (who make up roughly 80 percent of Edge’s user base) will not be able to access Bity’s third-party service.
“Unfortunately, this Bity integration is not available in the United States of America and Canada,” said Puey. “We have other integrations that do require KYC and are available in these jurisdictions.”
Vlad says that he's a political science graduate with a fascination for Bitcoin and free markets. His profs say he's a crazy anarchist who probably doesn't deserve his degrees. His parents say he's wasting his potential on a pipe dream.