Bitmex, a popular trade platform is a big attraction among the experienced traders, especially because of the 100x leverage they offer on bitcoin. While the facility is open to almost anyone with an email and bitcoin to trade, they have prohibited residents of the United State, Quebec (Canada) and a few other countries from their platform.
Why is it restricted?
When it started, Bitmex was open to everyone. Until recently, even US citizens could use the facility. Bitmex never gave a specific reason for this sudden change of rule. Many believe it was done to avoid complying with the US law.
The United States has one of the most complex financial systems in the world. Their regulation of financial services is one of the most stringent anywhere. Apart from the federal regulations, there is also the state’s individual regulatory needs and the list of compliances is endless. No wonder many businesses like to work in the US but service clients in another country.
If an Exchange or Brokerage accepts US residents, they have to register with the Commodity Futures Trading Commission (CFTC) and follow the CFTC standards while dealing with US customers. All this causes a major problem for many of the smaller exchanges. So they take the easy way out by banning American residents from their services.
Apart from Bitmex, many online brokers refuse service to US citizens.
How to get around this ban?
Using a VPN is one of the easiest ways to get around this ban. If you are a US resident and you already have an account at Bitmex, You won’t be able to do anything about it. But you can open a new account by tunnelling through a non-US-based VPN server. Since this is all financial data, we recommend you use a reputed service like NordVPN that encrypts your data from point to point.
When you deposit funds into your Bitmex account, the system asks you to verify your country based on your IP address. So it is important to keep the same server for all transactions.
Their terms and conditions say they can ask you for additional verification at any point in time. But we have not heard of that happening so far.
So as long as you use a good VPN and choose a non-US server, you should be able to use Bitmex with no problems. As a precaution, transfer your excess bitcoin back to a separate wallet after your trades.