BitMEX, a staple in the world of cryptocurrency derivatives trading, has announced that all users on the platform will be subject to mandatory identity verification.
Previously, registering to trade on BitMEX only required an email address, password, and choosing a country of residence. Beginning August 28, users will need to provide proof of location and information regarding funds, answer questions about trading experience, and provide other pieces of KYC information. There will be six-month grace period for legacy users, which will end in February 2021.
“These new controls will enable us to create a more trusted and secure trading environment for all BitMEX users,” reads BitMEX’s official announcement — though many in the industry are speculating that the move to verify users is being brought on in anticipation of increased regulatory pressure and scrutiny in the future. Continues the announcement:
Cryptocurrencies have come a long way in their 10 years of existence. Today, user identity verification is increasingly expected in order to meet evolving international regulatory standards, and is an important part of building trust in the cryptocurrency ecosystem. Practical customer security is greatly enhanced by identity verification, allowing BitMEX support personnel to reliably verify the actual owner of an account in the event of a dispute, hack, or incapacitation.
The move to verify users may be a short-term blow to the old and controversial derivatives exchange, which has been a prime destination for users looking to leverage trade cryptocurrencies without needing to undergo KYC requirements. A series of mishaps in recent years — including leaking users’ email addresses and liquidation issues — have already decreased trading volume on the platform. It stands to reason that more users will leave BitMEX once forced to identify themselves.
BitMEX’s parent company, HDR Global Trading Limited, is incorporated in Seychelles — where residents are forbidden from trading on the platform.
Image source: Pixabay
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