On August 24, 2020, cryptocurrency derivatives exchange BitMEX announced that it would block all Ontario-based users from its platform.
The decision to remove its trading services from the Canadian province comes amid a slew of regulatory restrictions from the Ontario Securities Commission (OSC).
As per the announcement, BitMEX exchange will no longer allow crypto traders from Ontario to open new positions starting September 1, 2020. However, those who already have open positions can trade on the platform until January 4, 2021.
The exchange now advises all affected traders to voluntarily close positions before the deadline lapses to avoid having their trades damaged via the exchange’s intervention.
Although BitMEX didn’t disclose their reason for barring Ontario traders, they did note that the restrictions were “mandated” by the OSC.
The move prompted some to speculate that the exchange plans to shut down operations in the Canadian jurisdiction because it hasn’t fully complied with Ontario’s rules and regulations.
BitMEX Strives to Become Regulatory-Compliant
The latest development comes as BitMEX works hard to become compliant with regulatory bodies across various jurisdictions.
As we earlier reported, the exchange recently introduced know-your-customer (KYC) verification to its platform to make transactions on the exchange more transparent and accurate.
The move to embrace KYC would also help build trust in the cryptocurrency sector, according to Arthur Hayes, CEO of BitMEX.
The Seychelles-based derivatives exchange has, at times, found itself in trouble with regulators who criticize it for exposing crypto traders leveraging its services to too much risk.
In May of 2020, BitMEX found itself in fresh controversy after being accused of abetting illegal activities. The activities included racketeering and unauthorized money transmission.
These accusations were brought by BMA LLC, who alleged that the platform offered US traders high-risk trading services of around $138 billion.
BitMEX has since shifted from its stance toward regulation to establish standards for digital asset products that will underpin the advancement of the emerging sector.
To this end, BitMEX today stated:
“We will continue to work with the Ontario Securities Commission to support its aims for the Ontario market and will keep our Ontario-resident customers updated.”
More Users Blocked
BitMEX has sought to abandon its controversial past by introducing strict verification rules that mandate users to upload documents confirming their identity and location.
In its attempt to become more regulatory-compliant, the exchange has also blocked crypto traders from several countries this month. These jurisdictions include Hong Kong, Seychelles, and Bermuda.
In the recent past, the exchange has also restricted trading to crypto traders in the Québec province in Canada, China, and Iran.