BitMEX Imposes KYC On All Exchange Users
Bitcoin futures exchange BitMEX has upset many in the Bitcoin space after succumbing to regulatory pressure and imposing KYC for its millions of users.
The biggest Bitcoin derivatives exchange which has grown massively due to its bypassing of regulations will launch its User Verification Programme on August 28.
The exchange claims it will promote a ‘more trusted and secure trading environment for all BitMEX users.’
BitMEX To Impose KYC For All Users
Derivatives exchange BitMEX has fallen to growing pressure and is set to follow Shapeshift and introduce KYC for all of its users.
With numerous jurisdictions around the world coming out with regulations for the crypto industry, the pressure has been intense as all governments look to ensure cryptocurrency exchanges fall in line with other financial platforms.
BitMEX spokesman Ben Radclyffe said all of BitMEX’s customers had to complete the new verification process by February 12, 2021.
‘User verification has been on our list of things to do. We’ve been getting ready for this, as it’s become necessary in order to run a scalable, responsible, compliant platform moving forward. This is a building blockchain for us to grow and do business in the future.’
BitMEX expected fallout from the announcement so to soften the blow the exchange announced it would offer a trading competition for those who complied.
As part of the User Verification Programme launch, BitMEX said it will unveil a Trading Tournament, offering prizes for those who’ve verified their identity, although it likely won’t appease many.
A Necessary Move For Any Centralized Exchange, And To Help Bitcoin Adoption
As upset as some will be, it’s a necessary move for any business wanting to expand.
Henri Arslanian of PwC explained, ‘Crypto exchanges putting in place institutional grade KYC and AML is essential for the further development of the crypto industry as it ensures to keep bad actors away and allows institutional players to be increasingly comfortable with the asset class.’
BitMEX claim the KYC process isn’t as in depth as some exchanges, and should only take a few minutes to complete.
As well as the usual government ID, users will also be asked to take a selfie. The most invasive part of the KYC process, however, will see users asked to questions relating to source of funds and their trading experience.
There are some benefits of trading on a KYC regulated exchange. BitMEX doesn’t have the best of reputations when it comes to customer relations. But if they’re falling in line, they will likely have to improve in that department.
And anyone who passes a KYC check, will be able to prove they’re the actual owner of an account in the event of any dispute, hack, or incapacitation, claims a BitMEX post on the matter.
First Coinbase, Shapeshift and Now BitMEX
Many see crypto exchanges who succumb to regulatory pressure and implement KYC checks for their users as selling out, but is it really?
Sure enough, Bitcoin is designed to get out of the corrupt banking monetary system. And of course Bitcoin doesn’t do KYC, but Bitcoin is completely decentralized with no ambitious CEO.
Like Coinbase and Shapeshift, BitMEX is a business, and it is dealing in millions of dollars every day, so for anyone to expect it not to have to fall in line, is being naïve.
Nobody wants KYC, and it might not be used for what governments say it’s used for, but the unfortunate thing is: If you want to trade Bitcoin, you will have to play by government rules, at least until a DEX grows enough in volume and trust.
Author: Tommy Limpitlaw
Why is one bitcoin so much?
Every bitcoin has value because they are useful as a form of money. In the case of Bitcoin, this can be measured by its growing base of users, merchants, and startups. And as the digital age continues to dominate, a currency that is built on the Internet and for the Internet, especially one that requires no third party and can be programmed, it just shows the potential of Bitcoin.
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