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Bitmex said Wednesday that it is rapidly following its user verification program in order to comply with regulatory requirements. Users must now be fully verified by November 5, 2020 “to continue trading on the platform,” he said.
In a statement, the cryptocurrency exchange said that “unverified users will not be able to open new positions” after this date. They also “won’t be able to withdraw funds from their Bitmex account without completing verification” starting December 4th.
Accelerated verification means that Bitmex’s mandatory know-your-customer (KYC) process, first announced on August 28, 2020, will close three months earlier than originally scheduled. Initially, it was scheduled for the end of February 2021.
Bitmex may have been forced to act due to the allegations it faces in the United States. The exchange was recently charged by the US Commodity Futures Trading Commission (CFTC) for operating illegally and for “failing to implement required anti-money laundering procedures.”
At the same time, the Department of Justice (DoJ) indicted former chief executive Arthur Hayes and his management team for “violating the Bank Secrecy Act and conspiring to violate the Bank Secrecy Act”.
“Recent events have highlighted the need for market participants to implement a robust and compliant KYC program,” Bitmex said.
As part of the exchange’s KYC procedures, individual users are asked to upload photo ID and proof of address, take a selfie, and answer several questions related to the source of their funds and their trading experience. Bitmex says this takes around five minutes to complete and since then over 50% of its users have completed the process.
By November 5th, Bitmex customers will need to have completed verification to open a new position or increase an existing position. Existing open positions can be held or reduced by unverified users, although pending orders that would increase a position will be canceled, he said.
After December 4th, “If there are any remaining open positions on unverified accounts, we will review them … and communicate directly to the users who hold them to facilitate an orderly close of these positions.”
Cryptocurrency exchanges are under pressure to implement stringent KYC procedures, as regulators around the world try to align with the Financial Action Task Force (FATF) anti-money laundering recommendations.
What do you think of Bitmex’s accelerated KYC processes? Let us know in the comments section below.
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