Crypto loans without KYC: how they work

A crypto loan without KYC is a loan you take without proving who you are: no passport, no selfie, no proof of address. It works because the lender is protected by the collateral you pledge, not by your identity or your credit history. It does not place you outside the law, and it is only as safe as the way the lender handles your collateral.

What KYC is, and why most lenders ask for it

KYC — know your customer — is the process of verifying a client’s identity before doing business with them. In practice it means uploading an identity document, often a selfie or a short video, a proof of address and sometimes answering questions about where your money comes from.

Lenders ask for it for two quite different reasons. The first is regulatory: many financial businesses are subject to anti-money-laundering rules that require them to identify their customers. The second is commercial: when a loan is unsecured, the lender needs to know who you are to judge whether you will repay, and to pursue you if you do not. A credit check, payslips and a home address all serve that second purpose.

Crypto platforms often add a third: most are exchanges or custodians offering many services under one account, and they apply the same onboarding to all of them, whether you trade, store or borrow.

Why a fully secured loan needs no identity

A Lombard loan reverses the logic of ordinary credit. The lender never relies on your promise to repay. It lends only a fraction of the value of the assets you pledge, watches that fraction around the clock and, if prices fall far enough, sells part of the collateral to protect the loan.

At Lombard Private, that fraction is at most 60% of the value of your bitcoin. If its price fell, you would see an early warning at 65% loan-to-value, a margin call at 70% with 72 hours to act, and only at 80% would part of the collateral be sold — just enough to return to 65%. At no point do we need your name, your income or your credit score, because at no point would we need to chase you.

What we ask for, and what we never ask

Opening an account takes about a minute. We generate a 16-digit account number, you choose a password and you can add a passkey or an authenticator app. You download a recovery kit and keep it offline. That is all.

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Keep it safe: we can’t reset it — we don’t know who you are.

The one personal detail in the whole process is the bank account that receives your loan, because a bank transfer needs a beneficiary. Our guide to crypto loans paid to a bank account explains how payouts work, and account protection covers passkeys, two-factor authentication and the recovery kit.

Why privacy is worth protecting

Most people who choose a lender that does not collect documents have nothing to hide; they simply prefer not to create a file that could be used against them. The reasons are practical:

• Identity databases leak. Copies of passports, selfies and home addresses held by financial and crypto companies have been exposed in breaches more than once. A document that was never collected cannot be stolen.
• Crypto holders are targets. Being identifiable as someone who holds significant crypto-assets brings phishing, extortion attempts and, in some reported cases, physical threats. The fewer places that link your name to your holdings, the better.
• Discretion is normal in private banking. Entrepreneurs, executives and families have always valued lenders who keep their affairs out of sight. A loan secured by your own assets is a private matter.

Collecting less is also the most reliable form of data protection we can offer: our privacy model starts from what we do not hold.

What “no KYC” does not mean

Privacy is a legitimate reason to choose a lender that does not collect documents: data that is never collected cannot leak, be sold or be stolen. But no-KYC lending has limits, and we would rather state them plainly.

It is not invisible

Your loan is paid into a bank account held in a name, and your bank knows its own customer. Blockchains are public: anyone can follow the movements of an address, even without knowing who controls it.

It does not change your obligations

You remain responsible for complying with the laws of the country where you live, including declaring income and gains where required. Borrowing privately does not exempt you from tax.

It is not available everywhere, or for everything

Our services are not offered in the restricted jurisdictions we list, and sanctions apply whatever the onboarding process. We refuse, and may bring to an end, any use of our services that appears unlawful.

It does not come with identity-based recovery

Because we do not know who you are, we cannot restore your access by checking a passport. Your recovery kit is the only way back in, which makes it as important as the keys to a safe.

How to judge a no-KYC lender

Without identity checks on either side, trust has to come from things you can verify yourself. Before pledging anything, check that the lender:

• Gives your collateral its own on-chain address, which you can check on a public block explorer at any time.
• Excludes rehypothecation in writing: your collateral is not lent, staked, pledged or otherwise reused.
• Publishes its thresholds — warning, margin call, liquidation — and gives you a reasonable time to act.
• Sells only what is needed in a liquidation, and returns any surplus to you.
• Pays you in your own currency, by bank transfer, with every fee stated before you commit.
• Publishes its terms, risk disclosure and fee schedule before you open an account.
• Never asks for your seed phrase, your private keys or remote access to your device.
• Never contacts you first, and never pressures you to act quickly.

Every point on this list is part of how we work: you can read our proof-of-collateral procedure, our liquidation policy, our risk disclosure and our fee schedule before you sign up. Our guide to rehypothecation explains why the second point matters so much.

Scams to avoid

The no-KYC label attracts fraudsters, precisely because their targets expect to share little information. Walk away from any “lender” that:

• asks for an upfront fee, an “insurance” payment or a “tax” before releasing a loan;
• asks for your seed phrase or recovery words, or for a wallet signature you do not fully understand;
• contacts you first by email, text, social media or a messaging app, or replies to a public post offering help;
• promises guaranteed approval, or a loan larger than your collateral could reasonably support;
• gives you a deposit address in a chat window rather than inside an account area on its own website;
• operates from a web address that is almost, but not exactly, the one you know.

No-KYC and KYC loans, side by side

The last row is the one that matters most. Identity checks protect the lender; they do nothing to protect your collateral. What protects it is a dedicated address you can verify, a contract that forbids reusing it and a liquidation policy that sells only what is needed.