BitMEX might add customer due diligence procedures and people are not happy

One of the world’s biggest cryptocurrency exchanges might be about to introduce know your customer (KYC) procedures and people are not happy about it.

Anonymity is a big thing in the cryptocurrency world. Many proponents of digital money have made it clear that they want to trade without supervision from the authorities.

Understandably, many regulators have been opposed to the lack of supervision, saying that bitcoin and other cryptocurrencies have become a key part of criminals’ money laundering schemes.

But now one of the globe’s biggest cryptocurrencies might be about to introduce KYC procedures in response to the pressure from regulators.

The individual behind, the bot-powered bitcoin market report service, first highlighted the push after finding jobs listings suggesting that BitMEX might be about to hire an (anti-money laundering) AML operations manager.

According to the listing on LinkedIn, the AML operations manager will have two responsibilities.

Firstly, the individual hired will develop “and manage the end-to-end process of conducting CDD for institutional and retail clients onboarding or existing on the BitMEX platform” and “be responsible to develop and manage the customer screening process associated with AML and sanctions requirements.”

Secondly, the person hired will “manage a team of operations analyst/associates in developing first level screening and review for exceptions generated from Chainalysis and other market surveillance tools.”

Some people in the Twitterverse responded to the news with some concern.

“Bitmex will kill their users by integrating KYC,” one user tweeted.

“KYCing will remove the last redeeming quality of BitMEX,” another said.

“Mass exodus will commence as soon as this is (officially) announced,” an individual speculated.

Others drew parallels with fellow exchange LocalBitcoin that introduced KYC last summer and has seen the volumes traded on the platform drop since. The people who made the comparison belived BitMEX could be facing a similar fate.

The news about BitMEX’s AML operations manager comes after Digitex, one of the company’s rivals, decided to remove KYC from its platform earlier this quarter.

When making the announcement, Adam Todd, CEO of Digitex, argued that he did not believe that cryptocurrency exchanges were used to launder money.

“I am not going to spend too long on this point because it is ridiculous,” he said in a statement announcing the removal of the KYC on the platform. “People are not laundering Ethereum into DGTX to fund international terrorism. [I] just sound stupid even saying that statement. It’s fucking ridiculous to even say it. So I am not going to waste your time talking about that side of the argument. It is obvious bullshit. It’s a crook of shit and I am calling it out for what it is.”

Enjoyed the story? 

Subscribe to our weekly RegTech newsletter and get the latest industry news & research

Copyright © 2018 RegTech Analyst


The following investor(s) were tagged in this article.