BitMEX has long been the most popular crypto derivatives trading venue, and it has several billions of USD of trading volume per day. The main reason that BitMEX is so popular is it’s the biggest crypto derivatives exchange which doesn’t require ID verification, so anyone in the world can login and short/long crypto to their heart’s desire.

Indeed, even though BitMEX banned numerous countries, including the United States, crypto derivatives traders simply began using Virtual Private Networks (VPNs) which shield their IP address, and use BitMEX anyway. 

However, that is all about to change. BitMEX has announced that on August 28 it will launch its ID verification program, where users will have to upload documents confirming their identity and location, as well as take a selfie and answer some questions. 

Notably, it seems that as of August 28 new users will have to automatically verify their identity or they will not be able to access BitMEX. As for pre-existing users, their accounts will stop working on February 12.

Ultimately, although BitMEX defied government regulators for years, it seems the regulatory pressure has become too strong, and BitMEX no longer has a choice besides implementing proper identity checks and banning users in countries where crypto derivatives trading is illegal, like the United States. 

Zooming out, it seems there are several other crypto derivatives platforms that are like BitMEX and will take BitMEX’s place, except these platforms have less activity and less liquidity. Also, it can be expected that any major crypto derivatives trading platform accessible in the United States will eventually be cracked down upon by government regulators as well.

Thus, it is about to become a lot more difficult to participate in crypto derivatives trading in the United States, and it seems long term crypto derivatives trading will eventually become unavailable in the United States due to regulatory pressure.