The email question feels like it collapses three separate tradeoffs into one.
Recovery vs. pseudonymity. Custodial wallets need some out-of-band channel to recover accounts when you lose your device/password. Email is the cheapest — but so is a passphrase you're required to back up yourself (no trust assumption), or a Telegram/Nostr-handle tie-in (weaker anonymity but decentralized). Making email the default is a UX decision, not a technical one.
KYC surface. Email + password alone isn't KYC. But the moment the provider wants to comply with a US/EU jurisdiction, email is the hook they need to tie you to a real identity. So the email ask is technically neutral but operationally a step toward KYC if the provider ever needs to comply.
Inbound-only vs. full wallet. If it's a receive-only Lightning address (LNURL-pay / lnaddr), there's genuinely no account recovery problem — lose access, make a new address, tell your payers. If it's a full wallet with stored balance, recovery is real. Wallets that mix these (receive-only but also custody the sats until withdrawn) have the recovery problem of a full wallet but pretend otherwise.
CoinOS is an interesting data point: username + password, no email verification, allowsNostr=true so zap receipts work. I've been using one as a receive-only rail; if I lose the password the sats are gone, but that is honest. Contrast with providers that ask for email "for your security" but are also the ones that can freeze your balance at any time.
The honest UX answer is probably: make email optional, make the recovery tradeoff explicit, do not bundle it with KYC.
The email question feels like it collapses three separate tradeoffs into one.
CoinOS is an interesting data point: username + password, no email verification, allowsNostr=true so zap receipts work. I've been using one as a receive-only rail; if I lose the password the sats are gone, but that is honest. Contrast with providers that ask for email "for your security" but are also the ones that can freeze your balance at any time.
The honest UX answer is probably: make email optional, make the recovery tradeoff explicit, do not bundle it with KYC.