BitMEX to Mandate ID Verification for All Traders as Maverick Exchange Ends Wild Ways

The change comes with a six-month “grace period” ending in February.

AccessTimeIconAug 14, 2020 at 1:00 a.m. UTC
Updated Sep 14, 2021 at 9:43 a.m. UTC

BitMEX, one of the oldest and most controversial cryptocurrency derivative exchanges, announced mandatory identity verification for all users.

  • Registering to trade on BitMEX takes "less than 30 seconds," according to its homepage, where new users outside of restricted jurisdictions are required to enter only an email address, password and pick a country of residence.
  • That will end on Aug. 28 when verification will be mandatory for all users, a process that will include proofs of location, funds, trading experience, and more, according to Ben Radclyffe, commercial director for the BitMEX parent company, 100x.
  • The policy change comes with a six-month “grace period” ending in February 2021 to accommodate unverified users completing the process.
  • Easy registration, high leverage and bitcoin-only account balances helped BitMEX bootstrap liquidity from all directions and give rise to its reputation as the destination trading platform for unorthodox cryptocurrency traders.
  • The exchange's primary motivations for this change are to remove barriers to entry for some of its target users, improve the security of the platform, and “get ahead of evolving regulation” in the cryptocurrency industry, Radclyffe said.
  • The change also will help BitMEX to better understand its user base, he added.
  • BitMEX's corporate strategy has included plans for mandatory identity verification “for a while,” but running the verification system at scale for all users took time, Radclyffe said on a call with CoinDesk, noting a “material technological lift.”
  • The Eden Island, Mahé-based exchange has prohibited U.S.-based traders from using its platform since 2015, and recently blocked would-be traders in Hong Kong, Bermuda and Seychelles as well.
  • Notably, a “good number” of BitMEX users have already verified their identities voluntarily, according to Radclyffe. Individual verification should take no more than five minutes to complete, he said. Corporate verification is a more involved process, however.
  • Over the medium and long terms, mandatory identity verification should increase the volume and liquidity on BitMEX, Radclyffe told CoinDesk, even if, in the short term, some traders decide against completing the process.
  • Radclyffe also described mandatory identity verification as a “building block” that sets the stage for future BitMEX products and a general “ability to do more.” For example, he told CoinDesk that BitMEX plans to host a “very significant” trading tournament later this year, which will require user identity verification.
  • BitMEX, known for popularizing the perpetual swap futures contract among cryptocurrency traders, is currently the second largest cryptocurrency derivatives exchange by open interest, with just less than $1 billion in open bitcoin futures contracts, according to Skew.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
June Was Bitcoin’s Worst Month Ever

Plus, European crypto regulation comes into view.

CoinDesk - Unknown
2
CoinDesk - Unknown
What Traders Are Saying About Bitcoin's Biggest Monthly Loss in 11 Years

Poor macroeconomic sentiment, fears of inflation and systemic risks from the crypto market pushed the cryptocurrency below 2017’s highs.

CoinDesk - Unknown
3
CoinDesk - Unknown
Three Arrows Capital Files for Bankruptcy in New York Tied to British Virgin Islands Proceeding

A British Virgin Islands court ordered Three Arrows' BVI branch into liquidation earlier this week.

CoinDesk - Unknown
4
CoinDesk - Unknown
Cosmos-Builder Ignite Cuts Headcount by More Than 50%, Ex-Employees Say

The reductions come amid a crypto market crash, and after the return of Ignite’s controversial ex-CEO.

CoinDesk - Unknown