- BitMEX has announced a KYC program starting in two weeks
- The exchange is finally falling into line after years of dodging financial regulations
- This is another step towards the legitimacy of the cryptocurrency space
BitMEX has finally taken a long awaited step toward legitimacy and announced that it is to introduce KYC after years of resisting such measures. In a sign of the increasing presence of regulation in the cryptocurrency space, the Cayman Island-based exchange, which has come in for criticism from financial authorities worldwide over its lack of regulation, has bowed to pressure and announced a User Verification Programme beginning on August 28.
On 28 August 2020 at 00:00 UTC, we will be launching our User Verification Programme. For details, please see our blog: https://t.co/9L2UNZk0t9
— BitMEX (@BitMEX) August 14, 2020
Bitmex Falls Into Line
The announcement from BitMEX is simultaneously surprising and unsurprising. Having existed for so long as an example of the Wild West of crypto, with no adherence to any regulatory body, it is something of a surprise that they have decided to comply with regulations that, in theory, may not have touched them for some time.
On the flip side, the crypto world has for some time now been moving towards a more legally sound footing, with governments around the world bringing in laws to shackle lawless cryptocurrency exchanges and payment handlers to ensure that they are not used for money laundering and other illegal activities. This makes the BitMEX KYC announcement slightly less surprising.
A Further Step Towards Legitimacy
Although BitMEX may have existed in its own little regulatory bubble since its creation in 2014, it has nevertheless attracted the interest of authorities in recent years. In July last year the U.S. Commodity Futures Trading Commission announced a probe into the company for allegedly allowing U.S. customers to use its platform, while the UK’s Financial Conduct Authority warned British traders against using it specifically because of its lack of regulation.
BitMEX may have been forced into introducing KYC by foreign authorities, or at least greatly pressured by them, but the fact is that if it wanted to stay relevant in the crypto space in the future then a KYC programme was an inevitable sacrifice it was going to have to make at some point.
Crypto Twitter Response Misses Bigger Picture
Crypto Twitter reacted with dismay to the news, with many quickly shilling their referral links to other margin trading exchanges, but those who wish to only trade on platforms where they can conceal their identity are going to find the pool of options growing smaller and smaller as crypto handling entities the world over fall in line with international monetary regulations.
10 more days until BitMEX starts to enforce KYC. 🚫
These are the 2 best options for non-KYC trading:
Oh, and I heard that Bybit is adding more pairs soon. pic.twitter.com/70d1HwRCl9
— Mr. Backwards ® (@Coin_Shark) August 14, 2020
The BitMEX announcement might not be great for those who want to trade contrary to international laws, but it is what the space needs if it is to mature and grow in the way that everybody hopes, and if that means shaking out those who want to jump from unregulated exchange to unregulated exchange then so much the better.