Bitcoin exchanges all over the world are coming face-to-face with tough decisions that need to be made. In the case of BitX, a popular Bitcoin exchange in the US, things have taken a term for the worse, as they are stepping up their verification process. Similar to what Coinbase is doing, most questions are being asked from their users, and failure to provide adequate answers will result in account suspension.
Also read: VC Funding of Bitcoin Companies Rises In Q1 2016
BitX Turns Into A Bank For Bitcoin Users
One thing that keeps Bitcoin exchanges safe from the “wrath” of financial regulators is how these companies are thoroughly verifying the identities of their customers. Asking for scans of sensitive personal documentation is a good way to establish the identity of users, and hold them responsible if anything were to happen.
However, some exchanges are starting to take more aggressive measures, by demanding even more information from their users.Coinbase, for example, wants to know why people are buying or selling Bitcoin and where the funds are coming from. Moreover, they also want to know even more personal details, such as FIC registration and whether or not Bitcoin will be used for individual or professional needs.
BitX is joining the growing list of Bitcoin exchanges taking this approach, as they have recently outlined a few new guidelines regarding the trading of Bitcoin on their exchange. In fact, their statement reads how “BitX does not restrict or endorse legal or personal transactions by their customers.” While having no restrictions is positive, the “not endorsing” part is rather worrying.
Although it is positive to see companies like BitX taking KYC and AML compliance very serious, this decision might offend part of their user base. While it is certainly true money laundering and funds acquired through illegal activities needs to be prevented at all costs, going after LocalBitcoins could end up hurting BitX businesses.
Granted, verifying the buyers and sellers on LocalBitcoins is rather difficult, as the platform lets anyone buy and sell digital currency in the world. BitX wants to ensure customer funds are completely clean, which is why they are conducting more thorough identity verification. Whether or not clients of this platform will take a liking to these new procedures, remains to be seen.
Source: BitX
If you liked this article follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin and altcoin price analysis and the latest cryptocurrency news.
