Most regulated exchanges must apply KYC, know your customer: they collect your identity documents and link them to every address you withdraw to. That link stays in their records, is often shared with authorities, and can leak.
Data leaks happen
Customer databases of exchanges and hardware wallet sellers have been stolen and published in the past, with names, emails and postal addresses. A leak turns a list of customers into a list of people who probably own bitcoin.
The alternatives
- Earning bitcoin directly: salary, freelance work, selling goods for bitcoin.
- Peer to peer marketplaces where two people trade without an exchange holding their identity.
- Buying in person, in places where the law allows it.
Rules differ by country. In many places it is legal to hold bitcoin without KYC, and in some, certain peer to peer trading is restricted. Know the law where you live.