Are bitmex just trying to scam with their kyc policy?

figmentofmyass

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Quote from: Bitcoin_Arena on September 17, 2020, 06:17:23 PM

Another Update;

While already existing users have until 12 February 2021 to have their accounts verified in order to continue trading in the exchange, Bitmex has passed out another announcement on the 15 September 2020 that all new registrations will require the users to first complete ID verification before being able to make deposits and trade on the platform, or receive affiliate income for referrals. KYC/AML regulations are biting harder!
https://blog.bitmex.com/announcing-the-bitmex-user-verification-programme/

wrong link. this is the announcement about mandatory verification for new users: https://blog.bitmex.com/new-account-registration-verification/

thanks for the heads up though. i'm glad i already have a couple accounts there that i can use in a pinch without submitting KYC, although tbh i am paranoid to fund them at this point with the threat of mandatory KYC looming over my head. Roll Eyes

when the market picks up again, i'll probably stick with a futures platform that doesn't require KYC. kumex and bybit and some of the smaller guys are still holding the line.....

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Another Update;

While already existing users have until 12 February 2021 to have their accounts verified in order to continue trading in the exchange, Bitmex has passed out another announcement on the 15 September 2020 that all new registrations will require the users to first complete ID verification before being able to make deposits and trade on the platform, or receive affiliate income for referrals. KYC/AML regulations are biting harder!
https://blog.bitmex.com/announcing-the-bitmex-user-verification-programme/

bbc.reporter

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@buwaytress. Yes they derisked themselves, only as protection from the lawsuits that their customers might open, however hehehe.

Also, there was an article that Binance had customer data stolen from their 3rd party processor. This was before Binance decided to handle customer data themselves.

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Quote from: bbc.reporter on September 06, 2020, 09:37:12 PM

This is funny. What it might do is separate the professional traders from the traders who trade on small volume hehe. I reckon professional traders give their KYC documents without any problem because it is only part of the job. It is the entitled people who trade on small volume who complain and also maybe some money launderers hehehe.

However, the real problem here is Bitmex competent enough to secure the data? They have leaked usernames and emails before.

I wouldn't count out the non-professionals like yours truly, I actually don't mind doing KYC at all -- but only at a platform I believe I will use long term (and that actually helps me with revenue reporting which, I'm a nice guy, I want to do to avoid any problems down the road). I have to sell regularly and predictably, and would like some protections, so yeah, I KYC'd right up at the main Europe exchange I use, as soon as it became available to me.

Is any exchange competent enough to secure the data? If they use 3rd party KYC providers like most exchanges I know do, then they've derisked this bit and left it to that 3rd party provider.

bbc.reporter

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Quote from: Vispilio on August 29, 2020, 06:06:05 PM

Bitmex will surely lose a lot of volume and customers and is on course to become a 2nd rate exchange,

its primary advantage was the funding rate swaps which their financial engineering team pioneered for crypto currency trading; but now that other exchanges are also offering equivalent products they might lose the edge, and with KYC and similar corporate responsibility requirements, they are becoming even more run of the mill,

strategically a weak move on their part, as I don't think the world needs yet another politically correct financial institution...

This is funny. What it might do is separate the professional traders from the traders who trade on small volume hehe. I reckon professional traders give their KYC documents without any problem because it is only part of the job. It is the entitled people who trade on small volume who complain and also maybe some money launderers hehehe.

However, the real problem here is Bitmex competent enough to secure the data? They have leaked usernames and emails before.

figmentofmyass

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Quote from: gentlemand on September 04, 2020, 01:38:53 PM

Quote from: jackg on September 04, 2020, 01:28:47 PM

There's a chance dexes will take over though too?

One would hope so. I will believe it when I see it. Most people want a hand to hold and big daddy to abuse them.

Some day a properly slick one will turn up but even then I wonder how many will take it up.

proper UI and atomic trade matching will make a world of difference. i see the push towards full blown AML/KYC on centralized platforms, and the improvement and decentralization of DEXs as two sides of the same coin---both gradually driving liquidity towards DEXs.

from looking at the direction of bitcoin development, i believe hidden scripts and cross-chain atomic swaps are gonna become very important avenues for maintaining on-chain privacy. this will in turn become an important source of liquidity for DEXs, and as we all know that's what really matters when people choose which exchange to use---how thick the books are.

gentlemand

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Quote from: jackg on September 04, 2020, 01:28:47 PM

There's a chance dexes will take over though too?

One would hope so. I will believe it when I see it. Most people want a hand to hold and big daddy to abuse them.

Some day a properly slick one will turn up but even then I wonder how many will take it up.

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Quote from: gentlemand on September 04, 2020, 01:14:24 PM

There'll be a point where you can't eschew KYC unless you're suicidal. There may always be non KYC exchanges but they'll become shittier and shittier as time goes by and the volume and security won't be there.

It's probably going to result in more noobs than ever being ravaged as the nefarious identify that as an area to exploit.

There's a chance dexes will take over though too?

Fiat to currency trading already almost always requires KYC, defi SHOULD be able to handle leveraged trading at some point and there are exchanges like Waves exchange which has an app and doesn't require a security deposit (unlike bisq) there's also potential for the lighting network to have availability within defi too afaik.

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Quote from: pooya87 on August 31, 2020, 11:59:39 PM

Yobit is a shady exchange that will never ever have KYC in any form because the only reason why anybody would ever use their service is that they are shady and won't ask for KYC ever.

as for Binance it could still be considered new and they are asking for KYC but not forcing it yet because they are fighting the regulations in the fear that they too will lose the position in ranking they temporary have which belonged to a series of other exchanges as #1 and be replaced by another one just like how they replaced their predecessor as soon as they forced KYC.

There'll be a point where you can't eschew KYC unless you're suicidal. There may always be non KYC exchanges but they'll become shittier and shittier as time goes by and the volume and security won't be there.

It's probably going to result in more noobs than ever being ravaged as the nefarious identify that as an area to exploit.

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Quote from: jackg on August 29, 2020, 02:13:46 PM

but binance and bybit both have similar services and aren't doing kyc verification?

Yobit is a shady exchange that will never ever have KYC in any form because the only reason why anybody would ever use their service is that they are shady and won't ask for KYC ever.

as for Binance it could still be considered new and they are asking for KYC but not forcing it yet because they are fighting the regulations in the fear that they too will lose the position in ranking they temporary have which belonged to a series of other exchanges as #1 and be replaced by another one just like how they replaced their predecessor as soon as they forced KYC.

JeromeTash

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They have given people time. I don't think they have any ill intentions such as scamming. I am actually surprised that they didn't have any strict KYC procedures this long, yet they were one of the biggest crypto derivatives exchange.

Trying to prove that someone is not from a restricted country minus KYC is close to impossible for them.

By the way for your information, you can not do futures trading on Binance without first completing KYC verification. Bybit will soon follow suit especially now that they have started accepting fiat deposits on their platform.

Lucius

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I don't think that BitMEX is trying to scam anyone with KYC, it is something that any centralized cryptocurrency exchange that wants to continue doing business can resist. It’s true that Binance International Service still offers a KYC-free option to withdraw up to 2 BTC a day, but I’d love to see someone who would try to do something like this on a daily basis and have their account not frozen. Binance is trying to win as much of the market as possible - but there have been many examples of them freezing user accounts and looking for KYC for some reason.

From what I hear the DEX volume has almost doubled lately, so if someone has a problem with KYC and doesn’t want to share personal information, an alternative exists.

exstasie

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Quote from: gentlemand on August 30, 2020, 05:23:29 AM

Everyone has to yield to KYC in the end. It's the price of doing increasing business. If they were scammers or irresponsible they'd carry on without it until they were shut down by brute force. This is a preemptive move to stay alive and in the good books of The Man.

Since there aren't many other games in town I expect we'll get lots of screaming and then most will quietly comply.

With Deribit and now Bitmex giving in, I could see a vacuum developing and Bybit filling it. They have a solid platform and competitive fees. People haven't had enough of a reason to leave Bitmex yet, but the month Bitmex makes KYC mandatory I won't be surprised if everyone on Crypto Twitter is spamming Bybit referral codes. Tongue

There's Kumex/Kucoin Futures too, although they cap unverified traders at 5x leverage, which may keep the real gamblers away. I saw data a while back saying Bitmex traders use considerably less than 10x leverage on average though, so they could still be relevant.

Something tells me there will always be strong demand for jurisdiction-hopping, no-KYC exchanges and derivatives platforms. Even if the US government goes after you, it takes a good 2+ years to build a case, and then comes the feat of shutting down a crypto-only service hiding behind anonymous servers in multiple countries. I don't even think there is precedent for shutting down services like these if they prohibit US customers and actually geo-block them.

But as Bitmex shows, any platform that gets big enough will always roll over.

gentlemand

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Everyone has to yield to KYC in the end. It's the price of doing increasing business. If they were scammers or irresponsible they'd carry on without it until they were shut down by brute force. This is a preemptive move to stay alive and in the good books of The Man.

Since there aren't many other games in town I expect we'll get lots of screaming and then most will quietly comply.

exstasie

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Quote from: jackg on August 29, 2020, 07:07:06 PM

in the UK we don't have identification requirements, instead you just give them your name, address and national insurance/social security number and thats a lot easier to do and I think it's safer than using government id.

Maybe so, but I hate giving out my SIN or SSN. All of it sucks.

Quote from: jackg on August 29, 2020, 07:07:06 PM

Quote from: exstasie on August 29, 2020, 06:07:03 PM

If Bitmex were exit scamming, they wouldn't give people 6 months to keep trading and withdrawing funds.

Stuff like this concerns me. Do they not have the funds to prop up old accounts? People left in 2018 and before and they're wanting to profit from that maybe... I dunno it just feels strange.

I think they just don't want to be accused of blindsiding their customers, so they are giving a very long grace period before the policies are enforced. It's sort of like when Binance axed US customers last year. Binance gave them 3 months notice, during which time they could keep trading and withdrawing as normal.

jackg

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Quote from: exstasie on August 29, 2020, 06:07:03 PM

Quote from: jackg on August 29, 2020, 02:13:46 PM

If binance brings in something similar I hope they do address verification (like stocks trading accounts do).

Why?

I'll reply to yours and the pharmacists at the same time but in the UK we don't have identification requirements, instead you just give them your name, address and national insurance/social security number and thats a lot easier to do and I think it's safer than using government id.

Quote from: exstasie on August 29, 2020, 06:07:03 PM

If Bitmex were exit scamming, they wouldn't give people 6 months to keep trading and withdrawing funds.

Stuff like this concerns me. Do they not have the funds to prop up old accounts? People left in 2018 and before and they're wanting to profit from that maybe... I dunno it just feels strange.

Quote from: The Sceptical Chymist on August 29, 2020, 05:34:41 PM

Quote from: jackg on August 29, 2020, 02:13:46 PM

This means bitmex have either found someone to buy all the kyc documents they took for the email verification last time or they're being put under stricter terms - they have an fca disclaimer now if you connect to them in the UK.

Wait, so they've already required KYC? I've never had a Bitmex account, so I don't know how they do things but what's the difference between the KYC docs and e-mail verification and what they're requiring now?

Again I'm a bit confused. Stock trading accounts require complete KYC, at least in the US. Just like getting a bank account. And I think Binance now requires KYC anyway.

Yeah I might have been better off mentioning it but I thought everyone had heard about their marketing managers stunt just before they left the firm of sending out a newsletter to emails subscribed but didn't have individual emails so everyone saw a copy of the mailing list. So people had to send in kyc if they wanted their email to be changed.

And in the UK we have address and electoral roll verification instead of kyc and I've registered on 4 exchanges and had the same thing.

FinneysTrueVision

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They're just trying to protect their business. It's not in anybody's best interest to do KYC because it limits the amount of potential customers significantly. It's government regulations that are forcing this unnecessary burden on everyone. At some point I expect Binance to start enforcing KYC more strictly as more countries demand compliance.

exstasie

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Quote from: jackg on August 29, 2020, 02:13:46 PM

From February, you'll have to kyc with bitmex or they'll freeze your funds apparently. Claiming they're doing it to ensure the only people using the exchange are in viable countries but binance and bybit both have similar services and aren't doing kyc verification?

We'll see how long that lasts. Deribit implemented KYC this past February. The list of platforms still offering trading without KYC is getting slimmer and slimmer.

If Bitmex were exit scamming, they wouldn't give people 6 months to keep trading and withdrawing funds. I think something more nefarious is happening behind the scenes. Pressure from governments, the FATF, etc. We'll have a better idea when the next domino (Binance, Bybit, Bitfinex, Kucoin, Poloniex) falls.

Quote from: jackg on August 29, 2020, 02:13:46 PM

If binance brings in something similar I hope they do address verification (like stocks trading accounts do).

Why?

Quote from: The Sceptical Chymist on August 29, 2020, 05:34:41 PM

And I think Binance now requires KYC anyway.

Only for their fiat gateways, like Binance US. Their main Binance.com site and futures platform still allows trading without KYC.

Vispilio

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Bitmex will surely lose a lot of volume and customers and is on course to become a 2nd rate exchange,

its primary advantage was the funding rate swaps which their financial engineering team pioneered for crypto currency trading; but now that other exchanges are also offering equivalent products they might lose the edge, and with KYC and similar corporate responsibility requirements, they are becoming even more run of the mill,

strategically a weak move on their part, as I don't think the world needs yet another politically correct financial institution...

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Quote from: pixie85 on August 29, 2020, 05:07:12 PM

What about people who deposited and forgot about their coins for a while? They could've had a death in the family, exams, wedding and honeymoon. They came back after a few months and their coins were frozen. The only way to withdraw is to do KYC but sometimes that's not enough.

Those situations are probably exceptions to the rule, but I'm not discounting the fact that there probably would be quite a few customers who missed the announcement and haven't been active and so forth. That really does suck for them if they get their funds frozen--but anyone who's seriously into crypto ought to know not to leave coins on an exchange for extended periods of time, certainly not long enough to forget about them. Crypto exchanges are not like banks or stock brokers. They're moving toward operating like both of those, but they're certainly not there yet.

Quote from: jackg on August 29, 2020, 02:13:46 PM

This means bitmex have either found someone to buy all the kyc documents they took for the email verification last time or they're being put under stricter terms - they have an fca disclaimer now if you connect to them in the UK.

Wait, so they've already required KYC? I've never had a Bitmex account, so I don't know how they do things but what's the difference between the KYC docs and e-mail verification and what they're requiring now?

Quote from: jackg on August 29, 2020, 02:13:46 PM

If binance brings in something similar I hope they do address verification (like stocks trading accounts do).

Again I'm a bit confused. Stock trading accounts require complete KYC, at least in the US. Just like getting a bank account. And I think Binance now requires KYC anyway.

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