BitMEX Customers Withdraw $85 Million Following CTFC Investigation

News and Analysis

In the wake of the news that the Commodity Futures and Trading Commission (CFTC) is investigating BitMEX due to suspicion of illegally offering trading to the U.S. citizens, users of the popular Bitcoin derivatives exchange have withdrawn almost $85 million, the highest amount among other leading exchanges.

According to data provided by TokenAnalyst, BitMEX saw $85 million in withdrawals compared to $54 million withdrawn from Binance and $52 million withdrawn from Bitstamp. While Binance and Bitstamp number smight also seem quite high, both exchanges saw relatively equal amounts of deposits while BitMEX only saw $12 million deposited.

The most likely reason for the customers to start moving out their funds from BitMEX is the recent news that the CFTC has set up an investigation against the margin trading platform for letting U.S. residents trade on the venue.

The news appeared in brief on Bloomberg Terminal on Friday. That was soon followed by a report from Bloomberg citing sources familiar with the matter. Bloomberg said the CFTC investigation is “ongoing” and may not lead to misconduct allegations though.

The CFTC considers cryptocurrencies like Bitcoin commodities and has jurisdiction over derivatives such as futures based on cryptos. As such, BitMEX would need to be registered with the agency to allow the U.S. customers to trade such products.

When contacted by ForkLog, a BitMEX representative said:

“HDR Global Trading Limited, owner of BitMEX, as a matter of company policy, does not comment on any media reports about inquiries or investigations by government agencies or regulators and we have no comment on this report.”

The CEO of BitMEX Arthur Hayes in an interview in January said that the exchange does not encourage customers who go against company guidelines. Therefore, U.S. residents had been blocked from accessing exchange. This could mean that that some customers used software that hides location to bypass the barrier.

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