on the crypto
BitMEX, one of the oldest and most controversial cryptocurrency derivatives exchanges, has announced mandatory identity verification for all users.
The new procedure
Registering to trade on BitMEX takes “less than 30 seconds”, according to its homepage, whereas until now, new users were only required to enter an email address, password and choose a country of residence.
This process will change starting August 28, when verification becomes mandatory for all users, a process that will include proof of location, funds, trading experience and more, according to Ben Radclyffe, commercial director of parent company BitMEX, 100x.
Big changes in the BitMEX policy
The BitMEX policy change provides for a six-month "grace period" that will end in February 2021 to allow unverified users to complete the process by entering the new requirements.
Easy registration, high leverage and exclusive accounts for buy bitcoin helped BitMEX bootstrap liquidity from all directions and gave rise to its reputation as a destination trading platform for unorthodox cryptocurrency traders.
The exchange's main motivations for this change are to remove barriers to entry for some of its target users, improve platform security, and "anticipate the evolution of regulation" in the cryptocurrency industry, Radclyffe said.
The change will also help BitMEX better understand its user base, he added. BitMEX's business strategy included plans for mandatory identity verification "for a while", but running the full-scale verification system for all users took time, Radclyffe told the media, stressing a " material technological improvement ".
The expected results in the medium and long term
The Eden Island exchange, based in Mahé, has prohibited US traders from using its platform since 2015, and recently also blocked would-be traders in Hong Kong, Bermuda and Seychelles.
In particular, a "good number" of BitMEX users have already voluntarily verified their identity, according to Radclyffe. Individual verification shouldn't take more than five minutes to complete, he said.
In the medium to long term, mandatory identity verification is expected to increase volume and liquidity on BitMEX, Radclyffe said, even if, in the short term, some traders decide not to complete the process.
Radclyffe also described mandatory identity verification as a "brick" that sets the stage for future BitMEX products and a general "ability to do more". For example, BitMEX plans to host a "very significant" trading tournament later this year, which will require verification of the user's identity, Radclyffe said in a statement released to the media.
BitMEX, known for popularizing the perpetual futures swap contract among cryptocurrency traders, is currently the second largest cryptocurrency derivatives exchange by open interest, with just under $ 1 billion worth of bitcoin futures contracts open, according to Skew. .
