The U.S. Commodity Futures Trading Commission (CFTC) is opening an investigation into the cryptocurrency exchange and futures trading BitMEX platform. The probe will determine whether the exchange has broken any regulatory rules.
BitMEX may be in some hot water as the CFTC begins its investigation into the cryptocurrency exchangeâs trading practices. Although rumors have been circulating online for some time, it is now confirmed that regulators have their eye on the worldâs leading cryptocurrency exchange for margin trading.
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*U.S. REGULATOR PROBING CRYPTO EXCHANGE BITMEX ON CLIENT TRADES@BitMEXdotcom under investigation, just two weeks after that @Nouriel v @CryptoHayes Tangle in Taipei.â Tim Culpan (@tculpan) July 19, 2019
BitMEX Under Fire
The reason for the probe is allegedly due to BitMEX not being stringent enough in barring American citizens from trading on its platform. Many users opt for using VPNs and other workarounds to bypass the exchangeâs geoblocking restrictions. According to BitMEXâs CEO Arthur Hayes, however, the company bars anyone who violates its terms of service. Hayes would likely argue that an exchange of this caliber canât be expected to police every individual user and that it has tried its best to enforce these rules.
It should be noted that a quick Googles search would indicate that bypassing BitMEXâs geoblocking of American residents is quite easy. In fact, many guides exist which show how to access BitMEX with a VPN for just a few dollars a month.
The No-Blame Game
BitMEX is owned and operated by HDR Global Trading Limited which is registered in Seychelles. Despite having many of its clients in the United States, the exchange will likely make the case that it lies outside of the CFTCâs jurisdiction.
BitMEX first began barring U.S. traders after the takedown of 1Broker, a similar cryptocurrency exchange which was closed by authorities due to not having a proper broker-dealer license. The details of the CFTC investigation into BitMEX are still forthcoming.
Up until this point, BitMEX was having a pretty outstanding year. The exchange hit an all-time record in trading volume this past May, posting over $10B in volume in just 24 hours.
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Do you believe BitMEX will be found to have committed any wrongdoing? Let us know your thoughts in the comments below.
