We get it—privacy and anonymity are big reasons people love the crypto-verse. And KYC (Know Your Customer) checks? They don’t exactly scream “permissionless freedom.” So why has Rails taken such a strong stance on compliance? Why do we ask you to verify your identity when some competitors don’t—and why should you actually love us for it?

Because at Rails, we believe lasting innovation in crypto rests on four pillars: speed, security, transparency, and compliance. Let’s break them down.

Speed

Our proprietary matching engine processes trades in near-instant time. By keeping this part of our product centralized, we can scale seamlessly, delivering lightning-fast settlements and real-time balance updates so you always get the best available price.

Security

You are always in control of your funds. Your funds are held on-chain in audited smart contracts that neither Rails, nor any unauthorized party, can access. We also enforce strict security controls across every part of our business, and don’t store sensitive user information internally.

Transparency

Every transaction is posted on-chain roughly every 30 seconds. That means every fee, deposit, withdrawal, profit, loss, and funding payment is verifiable on the Ink network through our Block Explorer. Since Rails doesn’t control your funds and you can independently verify all activity, you can trade with confidence.

Compliance

And now for the pillar some exchanges sidestep: compliance.

The truth is, global regulators are moving fast. Some jurisdictions are more relaxed, others are strict, but one thing is clear: enforcement is coming and evolving rapidly. Exchanges that don’t prepare face serious consequences, from hefty fines to forced shutdowns.

By building Rails from the ground up with compliance in mind, we’re not scrambling to retrofit controls later. That means we can focus on what matters most: delivering value to our users and expanding into new markets, without fearing sudden legal roadblocks.

Why do some competitors skip KYC?

Some decentralized exchanges (DEXs) embrace pure DeFi philosophy: anonymous, permissionless trading. If they’re not handling fiat deposits, regulators apply less pressure, and skipping KYC also makes onboarding faster. We get the appeal—but there are real risks:

• Financial crime risk: Without identity checks, platforms become targets for money laundering and sanctions evasion. Moral issues aside, regulators view inaction as complicity, which can jeopardize an exchange’s survival.
• Jurisdiction & access risk: Without KYC, there’s no way to comply with country-specific laws. Sure, you can use a VPN to evade geoblocks, but there’s always a risk that regulators might force the platform offline, leaving you unable to exit positions or withdraw funds.
• Reputational risk: Institutions and large funds (who bring liquidity and legitimacy) are unlikely to touch a no-KYC platform.
• Market integrity risk: Anonymous accounts make it easy to create duplicates, opening the door to wash trading and reward abuse. This manipulates markets and hurts real traders.

While no system is perfect, compliance controls are proven deterrents. They protect users, markets, and the longevity of the business.

Compliance without compromise