Bitcoin derivatives exchange surprised its users today by asking them to comply with a mandatory ID verification procedure.
The 6-month long process will continue until February 12th, 2021. BitMEX will start this ‘User Verification Programme’ on August 28 at 00:00 UTC.
In a blog post published today, the prominent bitcoin and cryptocurrency futures trading platform announced 6-month long mandatory KYC process. According to BitMEX, this will help the exchange establish a ‘more trusted and secure trading environment’ for all users.
Traders will have to comply by providing commonly required KYC details. These will include a photo ID, an address proof, and a selfie (as picture). Next, there will be a ‘few multiple-choice questions’. These questions will require users to declare the source of their funds and overall trading experience.
The Bitcoin margin trading exchange adds that it will be a short process and will only take five minutes to complete. Advocating the necessity of putting such a system in place, the exchange said that it is an important step towards meeting global regulatory standards and increase the legitimacy of the cryptocurrency ecosystem.
Additionally, the KYC process would safeguard users in the event of a ‘dispute, hack, or incapacitation’.
It seems that BitMEX is trying to make amends by introducing the KYC process. The exchange has had its fair share of controversies since the time it started operating, with the most notable one being the email leak last year.
As CryptoPotato reported, almost all users of the futures trading platform were affected due to the hack. But BitMEX assured traders that no information other than email addresses were leaked. The exchange went ahead and advised users to have their two-factor authentication turned on at all times.
However, the actioning of a KYC process implies that BitMEX doesn’t want to leave behind any loose ends. User verification will let the exchange have an in-depth understanding of its user-base. Also, it could leverage the available data to work with law enforcement agencies to intercept money laundering and other financial crimes.