BitMex exchange blocks Ontario residents from services

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Residents in Ontario, Canada, can no longer access the services of digital currency exchange BitMex, starting September 1, 2020.

In a statement, the platform announced, “With effect from 00:00:00 EST on 1 September 2020, we are restricting access to users who are Ontario (Canada) residents.”

“This will mean that existing customers who are Ontario residents will not be able to place orders that would open a new position or increase an existing open position. Open positions will continue in accordance with the terms of the relevant contract but must be closed by 00:00:00 EST on 4 January 2021 at the latest. On 4 January 2021, any open positions will be force-closed so we encourage Ontario-resident customers to close all positions as soon as possible before then.”

Why did BitMex block Ontario?

BitMex says they are restricting Ontario-based users due to a mandate from the Ontario Securities Commission. 

“The restrictions are mandated by the Ontario Securities Commission. We support the efforts of regulators to help establish standards for cryptocurrency products that will underpin the advancement of this rapidly growing asset class.” said BitMex. “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. If customers have any queries please contact Support.”

Leaving the grey economy

BitMex has been taking several steps to become regulatory friendly and legally compliant. Even before the Ontario announcement, BitMex was presenting its Canadian visitors with a message that said:

“HDR Global Trading Limited and its affiliates are not authorised or regulated by any regulatory body in Canada. Nothing in this website is intended to constitute the marketing, offering or promotion of HDR’s services. By using HDR Group’s services (including this website) you acknowledge that you are doing so on the basis of your own enquiry, without solicitation or inducement by HDR Group,” beginning in July.”

Since HDR Global Trading Limited is not licensed or registered to operate in Canada. BitMex began showing this message to their visitors to take legal liability off of themselves and put it onto the trader.

BitMex also announced that they would be implementing a mandatory KYC verification. The KYC registration will begin on August 28th and will be complete by February 12, 2021. These recent policy changes may have been induced by the regulatory framework that is on the horizon, and BitMex trying to beat regulators to the punch to avoid legal scrutiny.