Deribit, a Panama-based leading cryptocurrency futures and options exchange, has updated its KYC/AML policy citing various recent regulatory and legal developments globally.
Deribit’s official Twitter handle announced the news in a Twitter thread on Thursday, October 22. According to the announcement, the exchange wants all its users to become verified before the year is out. The announcement reads:
“Due to the various recent regulatory and legal developments globally, we have decided to increase our efforts to identify our clients.
Soon we’ll require all clients to become verified.”
The enhanced know-your-customer (KYC) program requires all Deribit traders to provide proof of government identification such as a passport or driver license, as well as proof of residence. Proof of residence is a new addition to the KYC policy.
Before this policy update, Deribit was using a two-tier KYC system that allowed withdrawals up to one bitcoin (BTC) or 50 ether (ETH) without a photo ID or proof of residence. First-tier, Level 0, required basic information such as name and email. Second-tier, Level 1, requires government-issued IDs to be able for unlimited withdrawals.
But the change in the policy will remove all these tiers requiring all customers to be verified to open an account on the platform. The announcement reads:
“Before year-end, we will require all clients to become verified. This will imply providing an ID document plus proof of residence. The latter is a new requirement.
New clients will be required to adhere to these market standard conditions in order to be able to open an account.”
Existing customers, if not verified, will get a month to provide necessary documents from a date that will be announced in the next few days. Corporate verified accounts don’t need to provide any further documentation.
The Deribit move follows similar action by rival and troubled derivatives exchange BitMEX that, on October 21, accelerating its KYC program, announced that it required all requiring all customers to be verified by November 5 to continue trading on the platform.
According to the announcement, after November 5, unverified users will not be able to open new positions and, from 4 December, will not be able to withdraw funds from their BitMEX account without completing verification.
The original deadline to complete KYC processes was February 2020, but the recent events have forced BitMEX management to complete all necessary compliance processes urgently.
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