Anonymity is one reason that got me into Bitcoin, Ethereum, and other cryptocurrencies. The most available ways to buy cryptocurrency right now requires you to verify your identity. Most of the time, they require you to provide your ID along with a selfie. Providing identity defeats the whole purpose of cryptocurrency. If you are using Bitcoin, Ethereum or any other cryptocurrency to remain anonymous, there are a few ways you could still remain anonymous.
How to Buy Ethereum Anonymously
One popular way of buying cryptocurrency is using P2P exchanges. These exchanges act as an intermediary between buyer and seller. During a transaction, funds are held in escrow by these services and releases once the buyer completes the payment. P2P exchanges are services that match the buyer with a seller.
As you know, exchanges like LocalBitcoins, BitQuick, and Paxful allows anonymous P2P bitcoin transactions. But these exchanges only support Bitcoin purchases. If someone wants to buy Ethereum anonymously, what they do is, buy bitcoin from P2P exchanges and convert to Ethereum. An exchange like Binance can be used to convert bitcoins to Ethereum. Binance does not require your ID to start using their exchange. However, they do require an Email address and a name when you signup. These details can be easily faked using a fake email and a name.
This method of buying Ethereum anonymously works; but along the process, you are sure to incur higher fees. I will show you other ways you can buy Ethereum and other cryptocurrencies anonymously.
LocalCryptos can be used to buy Ethereum. Just like LocalBitcoins, this is a P2P exchange service that matches a buyer with a seller. LocalCryptos does not require your ID. However, the seller may ask you to provide ID verification. Ethereum will be held in escrow until the buyer completes the payment.
LocalMonero is another similar service for Monero.
Some services allow you to buy Ethereum and other cryptocurrencies with a credit card. Changelly is such a service. However, if you try to buy Ethereum with fiat, it asks for verification. But, buying Ethereum with Bitcoin doesn’t ask for verification.
The third method of buying Ethereum anonymously is using an Ethereum ATM. You can find the nearest Ethereum ATM here. This option is not available to everybody. Ethereum ATMs are very rare compared to Bitcoin ATMs. However, please be aware that some Ethereum or Bitcoin ATMs ask for your ID prior to buying.
So, you need to look for an Ethereum ATM that doesn’t ask for your ID. Similarly, you can use a Bitcoin ATM to buy Bitcoin and later convert to Ethereum using Binance.
Update – No longer works
You can use VirVox to buy Bitcoin anonymously and later convert to Ethereum. However, this method is not straightforward like LocalBitcoins. To buy bitcoins using VirVox, first, you need to signup with your name and email address. After you signup, you have to deposit funds. Click on PayPal option to deposit funds to VirVox. You don’t need to have a PayPal account to deposit funds. You can deposit funds with your debit/credit card. VirVox just uses PayPal as a payment gateway. Because you want to buy bitcoin anonymously, you do not want to use your real credit/debit card. You can purchase a prepaid visa card and then use it to deposit funds to VirVox. You will be redirected to PayPal from VirVox. Then you must select the “Pay with a Card” option to add the prepaid visa card. You can find a prepaid visa card in almost any supermarket. Or, you can purchase one online. Egifter is the service I use to purchase virtual prepaid cards. Go to Egifter and search for “Visa”. You do not need to signup to use Egifter. After you deposit funds, you need to convert it to SLL (Second Life Lindens) in VirVox. Then you need to sell SLL for Bitcoin. After that, you must withdraw Bitcoin from VirVox to an exchange like Binance. Unlike many other exchanges, Binance does not ask for verification to trade cryptocurrencies. So, you can anonymously convert Bitcoin to Ethereum.
Buying Other Cryptocurrencies Anonymously
This method of buying Ethereum anonymously can be applied to other cryptocurrencies as well. Once you have Bitcoin, you can convert to any cryptocurrency using Binance.
However, you must take extra precautions when you buy cryptocurrency using one of these 4 methods. Although these methods are anonymous, you must hide your real IP address and use a different operating system to stay truly anonymous when buying cryptocurrency.
Whenever you use one of these 4 methods, make sure you also use the following:
Use Tor to Hide Your IP
Whenever you signup to any of the bitcoin services, exchanges, use TOR browser. Tor can hide your real IP address. Whenever you request a website, it will be seen as some other machine requesting that website. TOR hides your IP by routing your connection through different machines participating in the TOR network.
So, when you signup to LocalCryptos, LocalBitcoins, VirVox, Binance or any other service that can be used to buy Ethereum anonymously, TOR is a requirement. Your name and email address can be linked to your cryptocurrency public address when you signup to exchanges. Do not provide your real name or email address when signing up. To create an anonymous email address, you can use one on the darknet. Mail2Tor is such a service.
However, using TOR is not truly private. Someone who owns the first and last machine you used to connect to TOR can see your real IP. This is why using a VPN or VPN combined with TOR is a better option. A VPN works by routing your connection through VPN servers. Consider buying a reputed VPN service to stay anonymous. I use ibVPN because it supports payments via cryptocurrency.
One important aspect of staying anonymous is, using an anonymous wallet. To create an anonymous Ethereum address, I use MyEtherWallet. You can generate an Ethereum public and private key offline. So, when you withdraw Ethereum, send it to this address.
Use Amnesic Incognito Live System (TAILS)
If you are very serious about anonymity, you can use an operating system that is designed, prioritizing privacy. Amnesic Incognito Live System (TAILS) is such an operating system. It is a Debian-based Linux distribution aimed at preserving privacy. All connections are forced to go through TOR and non-anonymous connections are blocked.
So all the above activities including wallet creation, signing up to exchanges and services must be done with TAILS. TAILS has a GUI similar to windows. If you are new to TAILS, you will familiarize yourself fairly quickly.
How to Cash Out Ethereum Anonymously
Cashing out Ethereum anonymously is equally important as buying Ethereum anonymously. You can cash out Ethereum anonymously using a service like Egifter. Buy a virtual visa card with Egifter but when paying for the order, pay with Ethereum. Provide your anonymous email address to receive your virtual visa card via email.
If you own bitcoin that is tainted with your real identity and can be linked by someone with information, there are still ways to remove this trace. Check here.