Coinbase Hack: Why no KYC is the only option

On May 15, 2025 Coinbase, the largest U.S.-based cryptocurrency exchange disclosed a significant security breach that has sent ripples through the crypto community and especially the privacy community. Hackers exploited insider access to steal sensitive customer data.

The Breach and implications to victims

The customer data that the hackers where able to access included:

1. Name, addresses, phone numbers and email addresses
2. Last 4 Digits from social security
3. ID (Passports, drivers licenses etc)
4. Balance and transaction history

This makes coinbase customers susceptible to scams and identity theft, all because they wanted to trade digital assets. Your private life, your financial history, your very identity compromised.

These attackers now know exactly how much crypto people hold and where they live. just saying…

Why this breach matters

If you traded on Coinbase your personal information might be in the hands of malicious actors. This data can be weaponized for scams, identity theft or worse.

Why No KYC Is the Only way forward

We’ve written before about the dangers of KYC in crypto (Why No KYC is the Only Way for Crypto) and this breach highlights those dangers all too clearly.

KYC (Know Your Customer) procedures may be marketed as anti-fraud and regulatory necessities but they come with huge hidden costs:

1. Your Personal Information Becomes a Target: Centralized exchanges collect vast amounts of sensitive data. When they get hacked (like Coinbase), your identity and finances are suddenly vulnerable. This isn’t a theoretical risk, it’s happening right now.
2. Exclusion and Inequality: Not everyone has government IDs, and many users simply value their privacy too much to hand over such data. KYC creates barriers that exclude millions from participating freely in crypto’s promise of permissionless access.
3. Censorship and Control: With KYC, exchanges can freeze funds, block transactions, or ban accounts at will. Your crypto is supposed to be yours free from corporate or government control.

How to Protect yourself

The best defense is to avoid centralized KYC exchanges altogether. Use platforms that don’t require you to hand over your identity. When you trade on a no-KYC platform, you retain full control over your data and your privacy.

How CypherGoat Protects Your Privacy

As an open source, no-KYC exchange aggregator, CypherGoat puts your privacy first. We carefully assess and rank the KYC risk of all our partnered exchanges to keep your exposure to an absolute minimum. Unlike traditional platforms, CypherGoat doesn’t process transactions or store your personal data, we simply connect you directly to trusted exchanges while keeping your identity safe and finding you the best rates on the market.

Check out CypherGoat.com and trade crypto the way it was always meant to be: private, and KYC free.