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[Symmetrick]

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[figmentofmyass]

Hmm, apparently someone took the crypto derivatives exchanges seriously. The latest news is full of bad announcements, first they got down to BitMex, and they shortened the period for passing KYC to November 4 (it was until February 2021), then problems with OKEx, FCA prohibits derivatives for retail investors, now it's turn to Deribit.

Yesterday they announced forced verification for all their users:

They explained their decision by the changes in regulation around the world. Now, by the end of the year, all users are required to pass KYC, they will need to provide identification and residence.

Now new users will not be able to create new accounts without these documents.

The trend is not encouraging. Apparently, the increasing volume of derivatives trading is attracting the attention of regulators, I think the trend will continue and soon there will be no places left where it will be possible to freely trade futures or swaps without KYC, sadly, another good exchange has collapsed.

sources:
- https://forklog.com/deribit-vvedet-obyazatelnuyu-verifikatsiyu-polzovatelej/
- https://twitter.com/DeribitExchange

i'm not surprised, given the charges filed against bitmex this month. we are entering a whole new era re exchange regulation. now the cat is out of the bag---geolocation banning is not sufficient for AML/KYC purposes. under the current interpretation from the USA government, deribit and others who have been allowing unverified trading without withdrawal limits (admittedly deribit implemented daily withdrawal limits this past february) have been violating the law for years. we should expect exchanges to cover their asses by implementing KYC, kicking out USA customers (and also perhaps UK customers etc) or both.

if this trend becomes more widespread, we could see more and more coins leaving exchanges as customers are forced to choose between trading and KYC. this would at least be bullish for crypto prices.

[The Sceptical Chymist]

Never heard of Deribit, but I assume they deal in derivatives and that's probably one of the reasons why.

i'm not surprised, given the charges filed against bitmex this month.

I don't know whether the Bitmex thing had anything to do with Deribit, but that Tweet they put out was kind of vague considering how important it is.  IMO it would have been better had they specified whether they were being required by law to gather KYC documents from their customers, or if this is being done for some other reason.  The way I see it, if a government regulatory agency isn't forcing you to require KYC, you shouldn't. 

But I'm not surprised, either.  I'm pretty sure every exchange is going to be following all these other exchanges that suddenly slapped a KYC requirement on their clientele.  The law just hasn't caught up to the state of cryptocurrency yet.

[stompix]

The most important question which I think may single customers of theirs which haven't yet done the verification is asking himself...
What happens with the clients that don't go through this verification and their funds? Does his mean that if you want to avoid the new rules you can pack your bitcoins and leave but if by chance you're not active right now and you come back in two months you won't be able to get one penny unless you submit the documents?

I've always hated situations like this when you use for months if not years a platform, then they suddenly ask for KYC but even if you don't want to continue and just withdraw like you have done tens of times in the past no! you must submit! Submit! 

The trend is not encouraging. Apparently, the increasing volume of derivatives trading is attracting the attention of regulators, I think the trend will continue and soon there will be no places left where it will be possible to freely trade futures or swaps without KYC, sadly, another good exchange has collapsed.

There will always be some, although not really 100% legal, of course not that big and certainly far riskier from a customer point of view. You can't shut them all down all over the world and it takes time to launch a legal process against them so we might see these kinds of sites pop-ing up now and then as there will be always someone tempted by the money it could make by setting and running one.

The law just hasn't caught up to the state of cryptocurrency yet.

I hate it when just some part of the law is catching up and the good side of it is not moving one bit. Yeah, let's implement KYC for your own protection but stopping one moment from analyzing transfers of 100$ and taking a look at what the exchange itself is doing and how it's playing with the money of its own clients and losing it all...god forbid!

[Bitcoin_Arena]

I have never used Deribit but it was one of the alternatives to bitmex long before the likes of Bybit, Binance, Kucoin futures came into play. This is a sad development but after the Bitmex fiasco, I am no longer surprised that they are going to come hard on the other budding derivative exchanges that are not implementing sticker KYC/AML protocols.

I use Bybit more often but one of these days, I have a feeling they are going to be next.

[Darker45]

The people behind Deribit must have been terribly shaking when they heard of what BitMex has gone through. Fear is real!

What happened to BitMex must have waken them up and made them realize that no amount of clause under the Governing Law of their ToS would protect them from the powerful and overreaching hand of the US. The BitMex fiasco must have been an enlightening example for them. Their Panama license and US restriction are certainly helpless if the US wants to run after them.

Another battle won for Big Brother!

[figmentofmyass]

i'm not surprised, given the charges filed against bitmex this month.

I don't know whether the Bitmex thing had anything to do with Deribit, but that Tweet they put out was kind of vague considering how important it is.  IMO it would have been better had they specified whether they were being required by law to gather KYC documents from their customers, or if this is being done for some other reason.  The way I see it, if a government regulatory agency isn't forcing you to require KYC, you shouldn't.

that's obviously not how the american government sees things. as the bitmex case shows, they don't consider geolocation banning or prohibiting USA customers in the TOS adequate. absence of AML/KYC procedures is now seen as a basis for a charge of illegally operating in the USA. in other words, the feds say american laws have been forcing exchanges to implement KYC all along.

reading between the lines, this move has everything to do with bitmex. you may have noticed that bitmex just sped up the timeline on mandatory KYC too. the whole point of bringing the hammer down on the biggest derivatives exchange was to scare everyone into compliance.

[figmentofmyass]

I use Bybit more often but one of these days, I have a feeling they are going to be next.

I guess they don't have much time left.

there will always be some sites that continue to operate with impunity until the bitter end---like BTCE did. and also some (like binance) who wait until the last second and seem to get away with it. binance futures is still allowing unverified accounts of course.

it took the CFTC and DOJ at least 1.5 years, probably longer, to bring the hammer down on bitmex. with any luck, bybit and bitmax etc aren't even on their radar yet. with the market starting to look bubbly, i still need some non KYC exchanges where i can get a 5x or 10x long in.

[adaseb]

Didn't Deritbit start KYC about a year ago? I remember I wanted to open an account however I heard they started to KYC and just decided to skip it. So I am not surprised of this news. But from what I understood that if you wanted to open a deribit account in the past, you had to KYC.

Maybe if you had a legacy account like on Bittrex and Poloniex they allowed non-KYC for the last year or so. Then with what happened with Bitmex they didn't want to risk it and decided to make it mandatory for all account.

Wondering what will happen to Binance Futures and Bybit which are non-KYC still.

[Lordhermes]

This my first time hearing about Deribit exchange, although, most customers finds derivative exchange to be good. IMO, conducting KYC brings down or likewise reduces number of customers to an exchange, deribit must have had limited customers I think so, therefore will somehow reduce customers from them especially if verification takes longer time to be verified plus the fact that residential documents had been a greater issue now.
To me to KYC isn't necessary in an exchange but a tight security and privacy policy is more necessary to be implemented so as to avoid being scammed right a way.

[exstasie]

Wondering what will happen to Binance Futures and Bybit which are non-KYC still.

Bitmex did have unlimited withdrawals with absolutely no KYC requirements, as opposed to the 2 BTC limit at Binance Futures and the 10 BTC limit at Bybit. I wonder if that changes things at all. Then again, at these valuations, the limits at even Binance Futures are openly disregarding Fincen regulations, so yeah I'm really not sure how sustainable the status quo is.

Something tells me the days of no KYC won't be around for that much longer. Good old Uncle Sam.

[Harlot]

It might be discouraging for a lot of people in the crypto industry but to be honest this is inevitable to happen ever since crypto assets are mostly viewed as securities/investments. For people who are into investing but got into the crypto industry first they might think that KYC is something that violates their privacy and the government is spying on them or something but the truth is KYC has long been existing in other markets such the stock market and the forex market, just find a stock broker right now who will let you open an account without a KYC and I'll be shock as you. People should start moving on thinking that crypto is some kind of anonymous way of sending money because the days of that will be long gone now.