Crypto exchange BitMEX is making changes to the rollout plan for its User Verification Programme KYC procedures, accelerating the date for users to be fully verified to November 5, 2020. Full verification by this date will be necessary for a user to continue trading on the platform.
Another change to the rollout schedule means that, by December 4, 2020, users will not be able to withdraw their funds from their BitMEX account without completing verification.
What is the User Verification Programme?
BitMEX’s User Verification Programme (UVP) was introduced on August 28, 2020. As part of the UVP, individual users are prompted to upload a photo ID and proof of address, take a selfie, and answer several questions that relate to the source of their funds and their trading experience. BitMEX says this takes approximately five minutes to complete, and many of their customers have already completed the process.
“We’ve already got more than 50% of our client base through the process… which has been remarkably successful by any measure,” Ben Radclyffe, commercial director at 100x Group, the holding platform for BitMEX owner/operator HDR Global Trading Limited, told Decrypt.
By November 5, all users will need to have completed full verification in order to open a new position or increase an existing position, however, existing positions can be maintained or reduced by unverified users. In addition, pending orders that would increase a user’s permission will be cancelled, should that user not have completed the full verification process.
After December 4, if there are any remaining open positions on unverified accounts, BitMEX has said they will review these, and communicate directly with the account holders in order to facilitate the closure of these positions.
“Recent events have underscored the requirement for market operators to implement robust and compliant KYC programmes,” BitMEX said in a prepared statement, adding that “this has been a period of accelerated change for 100x Group and the BitMEX platform, and we are encouraged by and thank our clients and the wider industry for the support we have received in the last few weeks.”
BitMEX’s UVP has also been designed to offer a practical advantage for the exchange, allowing it to verify the identity of an owner in the event of a dispute.
Crypto exchanges have come under pressure from regulators in recent months to establish robust KYC procedures, as countries around the world look to ensure that their legislation complies with recommendations from the Financial Action Task Force (FATF).
Yet, the problem persists. Ciphertrace, a blockchain analytics company, recently published a report that said 56% of crypto exchanges have weak KYC procedures.