BitMEX falls to KYC – Where’s left for crypto’s anonymous traders?

The decision by cryptocurrency derivatives exchange BitMEX to align itself with the regulations of the traditional finance industry continues a worrying trend in the crypto space. BitMEX recently announced it would begin rolling out KYC (know-your-customer) requirements for its users starting August 28, 2020.

Any traders who haven’t submitted photographic ID and other personally identifying information by February 12, 2021 will be excluded from using the platform’s trading services. As an exchange best known for offering up to 100x leveraged trading options, BitMEX’s imminent enforcement of KYC procedures could trigger an exodus of advanced, high-risk traders from the platform.

But with most large exchanges also now complying with KYC rules and regulations, what safe havens remain for cryptocurrency’s privacy-centric traders?

Bybit

Bybit matches BitMEX’s ability to leverage trades by up to 100x without the need to upload any personally identifying information. Thanks partly to this strategy, Bybit has accrued more than one million global users since it launched in 2018. Despite what may initially appear to be a lax approach to security, the truth is Bybit is one of the few cryptocurrency exchanges that can truthfully claim to have never been hacked since its inception.

The exchange offers two-factor authentication (2FA) sign-ins, compatible with email, SMS and authenticator apps. User funds are stored in offline cold-storage, with multi-signature wallets used to ensure no single person can gain access to their contents.

Trading pairs and fees

The Singapore-based exchange currently offers leveraged trading on four major cryptocurrencies against the US dollar, encompassing five trading pairs in total: BTC/USD, ETH/USD, XRP/USD, EOS/USD and BTC/USDT. The BTC/USD pair can be leveraged at up to 100x at the current time, while Ethereum (ETH), XRP and EOS trades are capped at 50x leverage.

Under the maker/taker fee system, Bybit collects 0.075% from the taker of a given trade, while market makers are rebated with 0.025% to encourage the creation of more market depth. Boasting an infrastructure that can reportedly handle 100,000 transactions per second, Bybit expects to ultimately handle such volumes one day.

Bybit users should already be familiar with advanced trading options such as perpetual futures contracts and leveraged trading, however, even expert traders can benefit from the platform’s Smart Trading System. Users have access to advanced market data, strategy alerts, and stop-loss mechanisms, while market manipulation is combated with the use of a unique dual-pricing system.

Competition and conclusion

Competition is rife in the cryptocurrency exchange space, especially with the arrival of leveraged trading and perpetual future contracts, which all major platforms now race to offer.

But while Binance entices high-risk traders with 125x leveraged trades, and Bitfinex offers trading on over 25 different cryptocurrencies, both of these well-known platforms have recently fallen in line and accepted KYC requirements as standard.

High-value crypto traders will continue to seek the best combination of security and anonymity they can get. If BitMEX’s decision to enact KYC procedures does indeed trigger a mass exodus of users in the next six months, Bybit could be well placed to take them in.