Despite the slings and arrows of recent legal actions against its founders, leadership at cryptocurrency exchange BitMEX is bullish for the future of the derivatives exchange.
BitMEX was rocked when the U.S. Department of Justice and the Commodity Futures Trading Commission filed legal charges — including criminal charges from the DOJ — against the firm's co-founders and one early employee. Arthur Hayes — along with co-founders Ben Delo and Samuel Reed — are accused of operating an unregistered trading platform as well as violating CFTC rules, including anti-money laundering and know-your-customer regulations. BitMEX announced on October 8 that Hayes would no longer serve as CEO.
In conversation with The Block, some of the firm's top executives spoke about the firm's future trajectory, including its compliance efforts.
Chief commercial officer Ben Radclyffe and chief compliance officer Malcolm Wright said BitMEX is ahead of the curve relative to rivals on the KYC front. BitMEX announced Tuesday evening that it would speed up its user-identification program, which it first announced in August.
Originally, the firm's program would have required its users to go through full KYC by February — that deadline has been moved up to November. Already, 50% of the exchange's customers have gone through the program.
"This is absolutely the way the industry is heading as we have seen from recent events," said Radclyffe.
Wright joined the firm on October 12, bringing with him a 30-year background in AML and experience chairing Global Digital Finance's AML Working Group.
"I have been spearheading conversations with regulators on how the industry can comply with what has been set out with the FATF guidelines," he said on the phone.
"100x is going to lead the industry in best practices," he said, referring to BitMEX's user verification program.
Indeed, the conversation was prescient given news out of Deribit. As reported Wednesday by The Block's Yogita Khatri, the exchange will require all users to become verified before the end of 2020, CEO John Jansen confirmed.
Radclyffe, who avoided saying whether the speed-up of the verification program was prompted by regulators, said that advancing the program sooner will allow the BitMEX to more quickly devote resources to other initiatives.
"I think the important thing for us is this will free up resources to allow us to focus on all of the great stuff that we've had on our product pipeline," he said. "We launched yet another contract last week, LINK perpetuals. Another batch of futures is coming out at the end of October, more work on the mobile application, and focusing on what we do really well: liquidity, risk management products."
"Even in a difficult time we remain focus on the day job and keeping customers happy and keeping that liquidity on the exchange and remaining a top provider."