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New CFTC Investigation Targets BitMEX

BitMEX CFTC

Exchange

Regulation

Author

Linas Kmieliauskas

Author

Linas Kmieliauskas

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Last updated:

June 26, 2023

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The U.S. Commodity Futures Trading Commission (CFTC) is investigating whether major crypto exchange BitMEX broke rules by allowing Americans to trade on the platform, which isn’t registered with the agency, Bloomberg reported, citing “people familiar with the matter.”

The months-long CFTC probe is ongoing and the regulator’s investigations often don’t lead to allegations of misconduct, the report said, adding that the CFTC and BitMEX declined to comment.

In March, Marshall Islands-based firm 1pool Ltd. agreed to pay almost USD 1 million to settle CFTC charges that it broke rules when offering contracts that used Bitcoin as collateral, according to the report.

BitMEX is registered in the Seychelles, its main office is in Hong Kong, and it also has an office in San Francisco.

As reported in January, BitMEX was reportedly under pressure from financial regulators in the U.S. as well as the Canadian province of Quebec.

Then the company told Cryptonews.com, that it “has banned all U.S. Traders since 2015 and has been proactively closing accounts since guidance was obtained by US regulators, in particular the Commodities and Futures Trading Commission.”

It also added that “BitMEX has always retained the right to close any accounts and to liquidate any open positions where any BitMEX trading participant has given false representations as to their location or place of residence. This has been a normal part of our process since we started banning all US traders, we have had a number of situations over the past few years where we have enforced this policy. The only thing that was new in the fourth quarter of 2018 was that BitMEX instituted the use of warning banners and pop ups to inform all potential new users of the procedures.”

Late last year, some U.S.-based traders reported that they had gotten their accounts closed by the exchange.
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BitMEX CEO Arthur Hayes revealed recently that the exchange reached about USD 1 trillion in trading volume over the course of 2018.

Trading volume on BitMEX: