BitMEX Mandating KYC by Feb 2021, Not Bad for Crypto Market
Crypto derivatives exchange BitMEX now seems to be feeling the pressure of regulators as it announces mandatory know-your-customer (KYC) measures to “meet evolving international regulatory standards.”
Starting August 28, 2020, all BitMEX customers will be required to complete their ID checks within the next six months.
As per the User Verification Program, a user has to go through a four-step process, much like other cryptocurrency exchanges, that includes uploading a photo ID and proof of address, a selfie, and answering “a few multiple-choice questions about the source of funds and trading experience.”
With this move, the exchange says, they will be able to “create a more trusted and secure trading environment for all BitMEX users.”
Crypto trader DonAlt feels the same as he said it is “part of growing up,” and “all of the crypto will soon be KYC'd.” BitMEX also has “to do it at some point.”
It wasn’t shocking given the increased scrutiny the crypto space has been getting from regulators, who have already been probing into BitMEX for the past year.
“Whales are in all likelihood already KYCed. No reason to panic,” said trader and economist Alex Kruger. But because “Bitmex funding is flat which means longs and shorts are rather balanced. This matters in the event of unwinds.”
Moreover, this will help the industry as a whole, including the customers and new business entrants.
“I wouldn't say that's necessarily bad, just means shady stuff decreases while legit stuff (hopefully) increases,” said DonAlt.
Fellow crypto trader CryptoGainz is of similar opinion as the move by BitMEX will even the playing ground “in favor of newer exchanges building relationships with retail and offering favorable rates.”
However, the exchange has been losing its ground in the industry ever since the March sell-off as it saw its web traffic and BTC balance declining.
To soothe the sting of getting KYC’d, the exchange said it would also be launching a Trading Tournament with “sizable prizes.” Still, of course, only those that have completed verification will be eligible to compete.