Hong Kong based cryptocurrency derivatives exchange BitMEX will be launching a user verification program on August 28, requiring all customers to complete ID checks within the next six months.
But as a sweetener, they’re offering a trading competition that’s only available to verified customers.
While BitMEX was founded in 2014 and has grown to become one of the largest derivatives exchanges in the world, the platform hasn’t previously required user verification.
Commercial Director of BitMEX Ben Radclyffe told Cointelegraph that all of BitMEX’s customers must complete the new verification process by February 12, 2021:
“User verification has been on our list of things to do. We’ve been getting ready for this, as it’s become necessary in order to run a scalable, responsible, compliant platform moving forward. This is a building blockchain for us to grow and do business in the future.”
With numerous jurisdictions around the world coming out with explicit regulations for the crypto industry, Radclyffe noted that having a user verification process in place will help exchanges meet new operating requirements. User verification will also allow BitMEX to better understand their diverse user base, allowing the platform to develop tailor made products for customers.
Details of the large-scale trading tournament for verified customers in the coming weeks.
A five minute process
According to Radclyffe, BitMEX’s user verification program should only take customers five minutes to complete.
Individuals will go through a four step process similar to ID checks conducted by other cryptocurrency exchanges. Customers will be required to upload a photo ID and proof of address. In addition, a number of multiple choice questions relating to funds and trading experience will be asked. “Users who have been through an online financial services verification will be well versed in this process,” said Radclyffe.
Radclyffe said that BitMEX’s corporate customers will resume with the same verification process already in place, yet new features may be added to make the process easier moving forward. This is especially relevant, as BitMEX launched a new program for their corporate clients on June 22 to provide enhanced security and accounting features.
Good and bad
Compulsory verification is likely to be unpopular with some but provide others with greater confidence in the platform. In March, Cointelegraph reported that the exchange went offline for 25 minutes, leading members of the crypto community to question if foul play was happening behind the scenes.
Most recently, a withdrawal associated with the Twitter Hack on July 15 was made from BitMEX. Radclyffe explained that customer security will be greatly enhanced by identification verification, especially in the event of a dispute, hack or incapacitation.