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John Kiguru
Jul 21, 2019
by John Kiguru

Clients Abandon BitMEX, Exchange Sees Withdrawals To The Tune Of $85 Million Following Probing By CFTC

BitMEX
In the last couple of days, there have been reports that the U.S. Commodity Futures and Trading Commission (CFTC) has begun probing BitMEX. BitMEX is a cryptocurrency exchange and derivatives exchange based in Seychelles. In among other accusations, the exchange is said to be allowing trading activity in the U.S on its platform. Following these reports, many of its clients have chosen to cash-out in fear that trading will be halted by regulators or the exchange completely shut down. During the weekend, as the reports grew, the exchange suffered losses of around $85 million in less than 24 hours as clients withdrew their money.

CFTC Probing Follows Roubini's Essay Slamming The Exchange And Clash With CEO

The probe by the CFTC comes days after a bespoken crypto skeptic and economist wrote an essay slamming the exchange. Nouriel Roubini, New York University academic, published an essay stating that financial regulators have failed to stop unregulated exchanges. In the publishing, Roubinini singled out BitMEX stating that the exchange was a threat to retail investors.

His essay touched on a number of accusations ranging from front-running its own clients to ' peddling to 'degenerate gamblers' (meaning clueless retail investors) crypto derivatives with 100-to-one leverage.' However, his most notable and most incriminating accusation was on money laundering and aiding terrorism. He noted:

"BitMEX insiders revealed to me that this exchange is also used daily for money laundering on a massive scale by terrorists and other criminals from Russia, Iran, and elsewhere; the exchange does nothing to stop this, as it profits from these transactions."

The publishing of this article comes weeks after Roubini and BitMEX CEO, Arthur Hayes, went head to head. The two crashed in a debate in Taipei. Roubini argued Blockchain is overhyped and that cryptocurrencies are a scam. Hayes, on the other hand, talked about the benefits and potential of both.

BitMEX Response And Future

At the time of writing this, neither BitMEX nor its CEO, Arthur Hayes, has responded to the publishing of the article or the reported probing. The exchange will make an official announcement in the days to come and as the case intensifies. So far, what is clear is that the exchange's immediate future is troubling.

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Clients Abandon BitMEX, Exchange Sees Withdrawals To The Tune Of $85 Million Following Probing By CFTC
John Kiguru
John is an exceptional writer with a liking on technology, finance and the intersection of the two. A firm believer in the transformative potential of cryptocurrencies and the blockchain. When he is not writing, he likes to listen to Nas, Eminem and The Beatles.

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