BitMEX has announced the completion of its user verification program, making it one of the largest crypto trading platforms with a fully certified client base.
As part of the process to verify full usage base, BitMEX says open positions from unverified accounts have been closed.
In August 2020, the platform unveiled plans to perform comprehensive user identity verification. The move came amid increasing regulatory oversight of the platform’s notoriously lax Know Your Customer, or KYC, policies.
As previously reported by Cointelegraph, the United States Commodity Futures Trading Commission charged BitMEX for illegally operating a derivatives business. The New York District Attorney has also brought criminal charges against some of the company’s key actors, including former CEO Arthur Hayes.
In response, BitMEX announced plans to have revised anti-money laundering and trade control protocols in November 2020. According to Thursday’s announcement, user verification will be mandatory for deposit, trading and withdrawal features since early December 2020.
As part of the announcement, BitMEX also noted that $ 100 billion has been traded on the platform since reaching full user verification status.
BitMEX CEO Alexander Höptner said the move was an important step towards becoming a powerful platform:
“It puts us in a favorable position to take advantage of the wave of users – both retail and institutional – looking for a platform on which to trade crypto derivatives with confidence without sacrificing security, liquidity or performance. It marks a good start for BitMEX in 2021. “
Höptner, the former CEO of the German stock exchange Borse Stuttgart GmbH replaced Hayes as CEO of BitMEX back in December 2020.
BitMEX transition to user’s full KYC status offers glimpses of government regulators’ increasing level of control for crypto exchanges. Indeed, gone are the days of the cryptocurrency “Wild West” where platforms operated with little to no oversight.
With regulators demanding stricter compliance measures, attention seems to be shifting to decentralized exchanges, or DEXs, which provide a 1,000% peak in trading volumes back in Q3 2020.
Some of these decentralized platforms now offer margin trading with the added benefit of zero KYC steps to ensure anonymity. Non-custodial crypto exchange ShapeShift has even transitioned into a DEX on disaster, dumping KYC for its users.