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CFTC Investigates BitMEX

CFTC Investigates BitMEX

Bitcoin exchanges have difficult times in the USA. In a lot of cases, strict regulatory requirements ensure that crypto and blockchain companies censor themselves from making their platforms accessible to Americans. This is also the case with BitMEX – at least that’s what people thought – up to now.

Bloomberg Report About CFTC Investigation

The Bloomberg magazine reported that the CFTC has been investigating the crypto options exchange for some time now. The investigations focus on suspected cases according to which BitMEX did not consistently enforced the exclusion of users from the USA. The CFTC accuses the trading platform of inadequate KYC measures.

This goes against statements by Joe Coufal, responsible for PR at BitMEX, according to which “BitMEX has proactively banned all US customers since 2015”.

BitMEX particularly popular in Asia

BitMEX is registered in the Seychelles. However, the platform is available almost all over the world – with the exception of the USA, North Korea, Iran, Syria and Sudan. Especially in Asia, the options exchange enjoys some popularity. On BitMEX, futures traders can leverage Bitcoin profits (and losses) one hundred times.

Most recently, BitMEX has been criticised for favouring insider trading. During a debate with BitMEX CEO Arthur Hayes, Bitcoin boss Nouriel Roubini, also known as “Dr.Doom”, accused the stock exchange of acting against its customers. A video of this debate was initially kept under lock and key, which prompted Roubini to fire again against Hayes and his company, but has since emerged (in edited form).

Already in August 2018 there was a DDoS attack on the futures trading platform. But instead of issuing warnings to the users, there was talk of maintenance work. Many traders were unable to liquidate their positions and posted losses.

The future will show what consequences the CFTC investigations will have for BitMEX. But what we can already see is that the order books are getting thin as some market makers left the platform:

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