BitMEX Accelerates Mandatory ID Verification After Charges of Lax Anti-Money Laundering Controls

The exchange moved deadline for identity verification from February 2021 to November 2020.

AccessTimeIconOct 21, 2020 at 1:00 a.m. UTC
Updated May 9, 2023 at 3:12 a.m. UTC

BitMEX, which has been charged by the U.S. government with facilitating unregistered trading, has accelerated its mandate for all customers to verify their identities by Nov. 5, three months earlier than its original deadline of early February.

Stronger identity verification requirements is an industry trend, said Ben Radclyffe, commercial director of the exchange's parent company 100x Group, in an interview with CoinDesk. BitMEX’s decision to move the deadline from February 2021 to November 2020 follows this trend and internal plans the exchange has worked on for “over a year with a considerable amount of resources dedicated to this.”

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  • In August, the famously freewheeling bitcoin derivatives exchange announced mandatory identity verification. Less than two months later, charges were filed against the exchange by the U.S. Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC); after that, nearly 30% of its bitcoin balance was withdrawn by clients.

    Under the accelerated timeline, by 0:00 UTC on Nov. 5, all BitMEX traders and affiliates identities must be verified before increasing or opening new positions. By Dec. 4., all accounts must be verified in order to process withdrawals from the exchange.

    After Dec. 4, BitMEX will begin to review remaining open positions on unverified accounts and communicate the account holders, Radclyffe told CoinDesk. Funds will be recoverable and eligible for normal withdrawals post verification.

    “Well over 50% of BitMEX’s current trading volume comes from verified accounts,” said Radclyffe, representing the trading activity of tens of thousands of accounts.

    “The industry’s KYC-free days are coming to a close,” said 100x's chief compliance officer, Malcolm Wright, referring to know-your-customer rules.

    BitMEX plans to use its accelerated identity verification program, along with other corporate initiatives and Wright's experience as chair of an anti-money laundering working group at Global Digital Finance, to become an industry leader in identity verification initiatives, Wright said.

    Update (Oct. 21, 3:12 UTC): This article has been updated to clarify BitMEX's planned actions after Dec 4. and Wright's work at Global Digital Finance.

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