BitMEX announced the launch of its User Verification Programme today.
The digital asset exchange and crypto derivatives trading platform BitMEX is changing the game rules and will start asking its users to verify their identities.
The User Verification Programme will be launched on 00:00 UTC, August 28 although becomes mandatory from February 12, 2021. The upcoming six months will be given as a transition time, after which it will no longer be possible to trade without the ID verification on BitMEX.
BitMEX is among Top 3 largest crypto derivatives exchanges, following the statistics of CoinGecko. The exchange, which accounts for more than $1 billion worth trading volume daily, BitMEX aims to offer a more secure and trusted trading environment and meet the evolving regulatory standards. According to the official statement:
Today, user identity verification is increasingly expected in order to meet evolving international regulatory standards, and is an important part of building trust in the cryptocurrency ecosystem.
The new rules mean BitMEX users will now be asked to comply with the Know Your Customer (KYC) policy. The exchange will require new and existing users to go through a brief identification process.
The four-step identification includes uploading a photo ID, proof of address, taking a selfie, and answering a few questions about source of funds and trading experience. According to BitMEX, the process might take up to 5 minutes and is a common practice on various cryptocurrency exchanges.
The corporate clients will continue to go through the existing verification process, although the BitMEX team will be offering additional guidance.
Reportedly, as part of the new program, BitMEX will introduce a Trading Tournament where users will be able to win solid prices for verifying their identities.
Meanwhile, as a part of the new program, the crypto derivatives exchange will introduce a Trading Tournament where all users will be able to compete and win solid prices for verifying their identities.
The customer identification procedure becomes a critical process in fighting against financial crimes and money laundering, which is among the biggest threats both to financial institutions and individual clients.
Stolen identities are used for financial crimes and create solid damage for the direct victim including loss of funds or even criminal charges for the activity done by illegally using the stolen name of the unsuspecting person.
Furthermore, better knowledge of who their customers are allows financial companies to eliminate the risk of involvement in financial crimes and thus protects them from experiencing solid losses and reputational damage even without being directly involved.