bitmex - Pwim.Net

Bitcoin Whales are Controlling the Market

Bitcoin whales have been dominant in the market based on their massive liquidity. Tyler Swope, an expert crypto trader, has the viewpoint that Bitcoin whales have become overly manipulative this summer.

Bitcoin’s choppy price chart

As per Swope’s observation, Bitcoin has witnessed numerous pumps and dumps in a span of two weeks. As a result, a clear manipulation has emerged from nine thousand dollars ($9,000) to eleven thousand dollars ($ 11,000). Notably, whales have been taking advantage of the immediate volatile price swings.

Conversely, Swope reinforces his observation with Sunday’s abrupt Bitcoin price drop. Specifically, an all-day trade was prevailing beyond nine thousand five hundred dollars ($9,500), but an unexpected bear made it drip to nine thousand two hundred and sixty-five dollars ($9,265). Later on, bulls came calling to retrace back to nine thousand five hundred and seven dollars ($9,507). Astonishingly, all this trend happened within an hour.

Bitcoin whales on Bitfinex

Swope found the dump dragging Bitcoin price to nine thousand and one hundred dollars ($9,100) on Bitfinex. Notably, Bitfinex is an exchange that permits margin trading. As a result, the whales in operation instigated a well-orchestrated bear trap. Swope viewed this as a wreaking havoc procedure as different positions were witnessed on this exchange.

The Bitcoin whales on Bitfinex had different intentions such as the urge to liquidate. The other objective entailed luring novice traders into the manipulation that bears were calling. These traders were, therefore, unfortunate to undertake short positions. The Whales had selfish motives as they immediately went into a buying spree. As a result, these traders lost.

Conversely, other flash crashes have existed. For instance, on July 14, 2019, ETH price crashed on Bitstamp, a crypto exchange. As a result, a ripple effect was witnessed on another exchange called BitMEX.

Swope asserted Bitcoin Whales are reigning supreme in crypto exchanges. This is based on their self-interest at the expense of other traders and the market at large.

The Faces Behind the Billion Dollar Bitcoin Futures Market

The Bitcoin (BTC) futures market has exploded like no one could have expected over recent years and it continues to grow. This summer, BitMEX hit a new all-time record for BTC futures trading at over $16 billion. CME recently petitioned the CFTC to double its BTC futures trading capacity in the face of soaring interest. Binance has entered the space, and Bakkt has launched with its physically delivered BTC futures product (albeit somewhat tepidly).

In the light of so much action, let’s take a look at some of the key faces working to build the billion-dollar BTC futures market.

1. Arthur Hayes

Love him or hate him (there are very few people who stand in the middle) co-founder and CEO of BitMEX is arguably the most powerful man in the BTC futures space right now. His exchange is widely recognized as the most liquid in the market and frequently turns over billions of dollars a day in trading volume.

With his company registered in Seychelles and offering 100x leverage, BitMEX has democratized the BTC futures space like no other. It’s made a lot of people a lot of money–and also left plenty of novice traders REKT. Hayes has made a few enemies along the way with globally-renowned anti-Bitcoin economist Nouriel Roubini labeling him a criminal with an unregulated exchange).

That doesn’t take away from the fact that he’s a brilliant mind that has come from nothing to build the most popular BTC futures exchange currently available for retail traders. With a degree in economics from the Wharton School of Business and trading derivates in Hong Kong for many years, he’s used his extensive knowledge to make BitMEX the number one platform it is.

2. Kelly Loeffler

Even though it’s only been out for a month, it feels as if the CEO of New York Stock Market’s Bakkt, Kelly Loeffler, has been part of the fabric of the BTC futures market for a while now. That’s because she has. Bakkt first announced its plans to enter the market with the first physically settled BTC futures contracts back in the summer of 2018. However, it has suffered various delays and setbacks from U.S. regulators.

Despite that, and although Bakkt’s debut failed to cause the stir that was expected, many people consider its physically settled BTC futures product to be revolutionary as it will (when they’re ready) force investors to purchase or take delivery of the actual underlying asset for the first time.

Moreover, it seems as if traction is finally growing for Bakkt, as it saw its record day on Friday trading futures contracts at over 1,100 BTC.

Despite Kelly being key in ushering in a new era of futures products, she’s also a woman. And with so few women in blockchain, it’s refreshing to see a female making such an essential contribution to the BTC futures market.

3. Changpeng Zhou (CZ)

Changpeng Zhou (CZ) really needs no introduction. If you haven’t heard of CZ by now, you probably haven’t heard of Bitcoin or cryptocurrency either. As CEO and founder of the world’s most popular cryptocurrency exchange Binance, the company that shook the crypto world, only recently entered the crypto derivatives space. But they already hit a massive $150 million in 24-hour trading on their beta platform–and then surpassed the 24-hour trading volume of its spot markets earlier this month.

More importantly than that, Chinese-Canadian coder CZ’s got personality in bucketloads and are often leading and influencing debates going on in the crypto space. He’s also on the Forbes billionaire’s listwith a real-time net worth of $1.2 billion.

4. Terry Duffy

As chairman and CEO of the Chicago Mercantile Exchange Group (CME), you would think that the man at the helm of one of the highest-profile BTC futures trading products would be a little more bullish on Bitcoin. Despite smashing trading volume records and his competitors CBOE into submission, Terry Duffy doesn’t see Bitcoin as having a long-term future.

He toldBusiness Insider at the FIA’s International Futures Industry Conference in Florida earlier this year that he only saw fiat-backed digital currencies as staying the distance. He also believes that there is too much speculation in the space and not enough use cases (ironic, given the nature of his business).

Still, that was before the recent talks with the CFTC, and while Bakkt’s launch date was still somewhat blurry. Perhaps, Terry’s outlook has changed since then.

5. Jesse Powell

Co-founder and CEO of one of the industry’s longest-running cryptocurrency exchanges, Kraken, Jesse Powell, is an influential figure in the industry. He’s also a pretty decent guy and one of the first to offer assistance in high-profile exchange hacks. Kraken is well-known for refusing to give in to regulatory bullying too, negating to comply with a New York inquiryfor customer information.

Not wishing to be left out of the BTC futures space, Kraken purchasedUK-based Crypto Facilities derivatives trading firm earlier this year. The move made Kraken the first crypto exchange for offering spot trading and futures trading (although not to U.S. customers).

6. Adam Todd

Pertaining to another impressive BTC futures platform that is yet to launch, there are few people in this industry who haven’t heard of Adam Todd or seen his legendary viral videos. After a couple of highly public delays and developer fall outs, Adam has teamed up with developers SmartDec to get his industry-first commission-free futures exchange over the line.

Another of crypto’s controversial figures, the Digitex Futures CEO, is bringing something arguably even more unique to the BTC futures space with zero-fee trading. With the testnet launch coming up on 30 Nov on the Ethereum mainnet, soon active short-term traders will be able to trade BTC futures contracts aggressively and pursue scalping strategies that simply aren’t possible on the fee-charging exchange models currently available.

Wrapping it up

There are plenty more faces behind the billion-dollar BTC futures market with more and more exchanges throwing their hats into the ring all the time. From established players like OKEx and Bitfinex to newer entrants like Derebit and Idax, a lot of money is changing hands daily in this burgeoning industry. With new developments afoot with physically-settled BTC futures contracts and commission-free trading, there’s plenty to keep your eye on in the derivatives space.

Image via Shutterstock

UK’s Financial Watchdog Raises the Alarm on BitMEX Being Unauthorized

The Financial Conduct Authority (FCA) in the UK mandated with regulating financial markets and service firms in the nation has blown the whistle on Seychelles-based crypto exchange BitMEX for not being authorized. According to the regulator’s statement, the exchange was operatingin the UK without being given the green light by the financial watchdog.

BitMEX on the receiving end

BitMEX found itself in unfamiliar territory because the FCA insisted that the firm has been providing financial products and services to UK residents without being authorized.

The FCA noted, “Almost all firms and individuals offering, promoting or selling financial services or products in the UK have to be authorized by us. However, some firms act without our authorization and some knowingly run investment scams.”

The regulator added that BitMEX was indulging in regulated activities that necessitated authorization as this was instrumental in curbing runaway investment scams. The FCA also presented a myriad of caution that scammers usually provide false details or at times alter their contact information over time to new physical addresses, telephone numbers, or email addresses.

As a result, precautionary measures were of the essence as the FCA enlightens UK residents to only deal with accredited financial firms as per the Financial Services Register.

UK’s footsteps in crypto

The United Kingdom has also been making waves in the crypto space. For instance, in December 2019, the high court granted a freezing order over £1.5 million worth Ethereum and Bitcoin against a crypto trading firm and its directors. This incident became the second known one where a UK court had treated cryptocurrency as property.

Additionally, last month, DAG Global, a UK financial services company, made headways as it attemptedto become the first UK bank to support crypto businesses based on the roaming void.

The former Head of Technology for the Barclays group, and former CTO at Starling Bank in the UK, Mark Hipperson is planningto launch a regulated crypto bank with his digital banking venture Ziglu. Ziglu has applied to the UK’s Financial Conduct Authority (FCA) to become a regulated issuer of electronic money. Currently, only UK residents who are over the age of 18 are permitted to use Ziglu’s services and are eligible to apply for an account.

Image via Shutterstock

BitMEX Research: Inflation Aftermath of Coronavirus Financial Crash Will Be Bitcoin's Greatest Test

In the aftermath of the current Coronavirus market crash and the subsequent incoming inflation that will be caused by the response of the Federal Reserve and Central banks, Bitcoin will face its truest test and be presented its biggest opportunity to prove itself in its short lifetime, according to new research from global crypto exchange BitMEX.

Bitcoin Could Anchor the New Economy

BitMEX Research published their analysis , Inflation is Coming, on March 17, outlining that the global response to the pandemic and disruption will, “mark a significant economic regime change from monetary policy to central bank funded fiscal expansion” from which intolerable market inflation will rise. It will be within this oncoming financial environment that Bitcoin’s true nature should finally be revealed.

Central banks and governments have been fast to respond to the disruption caused by the Coronavirus. The analysis highlighted, “In the US the Federal reserve has lowered interest rates to near zero (0% to 0.25%), announced the purchase of at least $500bn of treasuries and $200bn of mortgage backed securities, and also reduced the commercial bank reserve requirement to absolute zero.”

Bitmex believes that there are further measure to come, but it is clear that these attempts to restabalize the broken system are, “the last major throw of the dice from central bankers. Monetary policy will not be enough.”

The researchers claim that not only will inflation come, “it will be a shock” as inflation has been low and stable for 30 years and our collective memory does not nor recall the consequences of digging ourselves into such a financial hole. Although they do not specify exactly when the inflation will hit, BitMEX predict it will be “similar to the 1970s where it went as high as 15%.”

US Consumer Price Inflation YoY

Source – Bloomberg

The analysis by BitMEX’s research arm stated, “ In our view, in this changed economic regime, where the economy and financial markets are set loose, with no significant anchor at all, not even inflation targeting, it could be the biggest opportunity Bitcoin has seen, in its short lifetime.”

Bitcoin’s Value and Trading in CrisisIn a recent interview with Blockchain.News, FXCM’s Managing Director Michael Kamerman addressed Bitcoin’s potential to be an alternate store of value to gold, He said, “There are two parts to this question. First, is Bitcoin a “safe haven?” My answer is, no, not yet. It has the characteristics of what would be a “safe haven” asset but if you look at the way it moves on a chart, it is not a “safe haven” instrument.” He added, “I think as Bitcoin is more widely adopted, investors and traders will wake up to its “safe haven-like” qualities – but it is too early now.”

Prior to the recent stock market crash which sent equities plummeting, traders hardly had a trouble-free environment to operate within. Over the last year, market participants have also had to contend with a China-US trade war, Brexit uncertainty and Coronavirus disruption, making investment anything but straightforward.

On his observations regarding traders’ movements over the last year of rising uncertainty, Kamerman said, “I would not say our customers are shifting their investment sentiments, but instead remain opportunistic. If forex is moving, they trade forex. If Bitcoin is moving, BTC/USD is all the rage. Recent volatility has benefitted our cryptocurrency product line in that our number of active crypto traders is up. Data does not show our customers choosing crypto over forex or vice versa. Customers just want to trade what is moving.”

Has Judgement Finally Come for 2017 ICOs? Class Action Lawsuits Name Binance, BitMEX and Block.One Among Host of Crypto Defendants

11 class action lawsuits have been filed against 42 defendants for violating securities law by Roche Freedman LLP. Among the companies named were some of the crypto industry’s most prominent players including Binance, Block.One and Bitmex.

According to OffShoreAlert, the class action law suits were filed in the Southern District of New York Court on April 3 for the sale of unregistered securities.

The lawsuits have also included crypto firms HDR Global Trading; Tron; Civic; Kyber Network; Status; Bibox; KuCoin, and Quantstamp.

Several executives have also been specifically named including Changpeng Zhao (CZ) of Binance, Brendan Blumer and Dan Larimer of Block.one (EOS), Vinny Lingham of Civic, as well as Arthur Hayes of BitMEX.

Roche Freedman LLP is known in the crypto industry for having represented the estate of the late Dave Kleiman in its lawsuit against the self-proclaimed “Satoshi Nakomoto” and instigator of the BSV fork, Craig Wright.

2017 ICO Reckoning?

The crypto world suffered an onslaught of initial coin offerings (ICO) in 2017 as bitcoin surged bringing with it a manic public interest and incredible inflows of investment to the nascent digital space. As outlined by Offshore alert, the ICO investors who collectively lost 80% of their investments during this period were entitled to certain financial disclosures as mandated by the United States Securities and Exchange Commission (SEC).

At the time, many of these project sought to take advantage of the loose categorization of digital assets and many were successful in separating investors from their money with little recourse brought against them. It appears that these new law suits are targeting the ultra successful companies that executed ICOs such as Binance, which has grown into a colossus and was even able to recently acquire CoinMarketCap for $400 million.

The class action has been made on behalf of several individuals who invested in these 2017 projects including Chase Williams, Alexander Clifford, Eric Lee, and William Zhang, but also include “all others similarly situated.”

The lawsuit covers 42 defendants across 16 different countries, some with very little enforceable regulation. Decentralized projects means that there are rarely any central figures to hold accountable and bringing many of these projects to justice will prove near impossible for the Courts.

Has Telegram Ruling Opened Floodgate?

Many believe a precedent may have been set when the SEC won an important decision in their court case against Telegram over the legal status of the latter’s $1.7 billion Gram token offering.The US federal court granted the regulator an injuction to halt the distribution of Grams at the outset of the legal battle as the evidence presented to the court through the SEC’s Howey Test appears to have compelled them to act in favour of the regulator veryearly in the legal proceedings.

On Feb. 18, Telegram’s lawyer, Alexander Drylewski had criticized the application of the SEC’s Howey Test, citing that a test designed to categorize securities does not apply to digital assets that are offered with a promise of managerial oversight, that will increase their value over time.

Philip Moustakis, attorney at Seward & Kissel LLP and former SEC counsel told Blockchain.News that the SEC application of the Howey test was done correctly stating “An issuer cannot avoid application of the federal securities laws by separating in time the capital raise and the delivery of the digital representation of the investor’s interest in that capital raise. And, at delivery, in my view, the Grams would still represent the series of promises and understandings that led up to their distribution.”

It appears the success of the Howey Test in determining Telegram’s 2018 ICO as the sale of unregistered securities may have opened the floodgates for the crypto industry with the class action lawsuit being mounted by Roche Freedman LLP very shortly after the US Courts sided with the SEC.

Pressure Piles Up on BitMEX as Recent Outage Exposes Network Holes

Once branded a “Bitcoin casino,” BitMEX has plunged into a series of crises over the last few years. The crypto exchange found itself trending on Twitter in the US recently because of the recent shutdown. BitMEX announced that its trading engine went offline for over an hour because of an incident, which the exchange identified as a “major outage.”After some investigation, the exchange later announced that that platform restored its online operations.

The exchange announced that all funds were safe, and no liquidations happened during the downtime. Once the platform resumed its operation at full capacity, the exchange said that full postmortem would be conducted and released to the public within the next few days.

Recent outage exposes BitMEX’s network holes

Such outage of BitMEX’s trading engine is the latest in a series of negative circumstances facing the exchange. Currently, as Bitcoin price hits $10,000, the major outage has prompted warnings that the exchange is becoming increasingly unreliable. The outage left customers unable to access their funds.

Closely-watched crypto and Bitcoin analyst Scott Melker said that he has been warning people about BitMEX for nearly three years now, saying BitMEX is a “horrible” exchange.

Another Bitcoin trader stated, “I just do not understand why people still trade there.”

In recent months, crypto and Bitcoin exchanges across the globe have experienced increasing new user signups and surging demand partly due to lockdown measures put in place to slow down the spread of coronavirus pandemic.

The rising demand is putting the stability of some Bitcoin exchanges into tests, with Coinbase, the largest US cryptocurrency exchange, went offline as Bitcoin price crashes earlier this month.

Jim Nevotti, the president at software provider Sterling Trading Tech, said that recent outages experienced by some crypto and Bitcoin exchanges have exposed fault lines in their underlying infrastructure.

BitMEX’s market share has been eroded by other crypto exchanges expanding their crypto and Bitcoin derivatives offerings. But BitMEX’s problems have also caused users to seek alternatives.

In March, a sudden decline in the Bitcoin price to fall under $4,000 was caused by BitMEX before the crypto exchange was closed for maintenance.

In the previous year, BitMEX sparked panic amongst investors and traders after accidentally exposing thousands of its customers’ emails – with the exchange’s Twitter account compromised shortly after.

The latest outage comes just a few days BitMEX was hit with a lawsuit on May 18. The lawsuit accused the exchange of having engaged in multiple illegal activities, including wire fraud, money laundering, and market manipulation.

The lawsuit also reported that a full 15% of BitMEX’s crypto trades in 2019 came from US-based traders despite the exchange not having the appropriate license to allow such kind of trading.

The crypto exchange disputes the allegations, with its spokesperson said that the exchange would deal with the complaint through a normal legal procedure and is completely confident that the court would make a fair ruling.

Recently the exchange was forced to restrict access to users in Japan because of increased crypto regulations enforced by the nation’s Financial Services Agency (FSA).

UK’s financial watchdog raises the alarm on BitMEX being unauthorized

Recently, the UK’s financial regulator, the Financial Conduct Authority (FCA), warned local consumers about the operations of BitMEX. The independent financial regulator announced that the crypto exchange has been targeting UK residents without approval or obtaining permission to offer services. The agency confirmed that it holds information that proves that the cryptocurrency exchange had been illegally conducting activities that must be regulated and require approval from the regulator. In other words, the financial watchdog stated that BitMEX was operating in the UK without being given the green light by the regulator. Now it remains to see how BitMEX would address the challenges highlighted above.

Image via Shutterstock

June 1: Sell in May Postponed to Sell in June?

Trading Crypto with Eugene is a series of daily commentary of market analysis and trading advice shared by Eugene Ng of Matrixport, a veteran trader with 10 years of experience in top-tier global investment banks. If you like the article, please follow us here on Blockchain.News so you won’t miss our future publications.

BTC shot up by $400 to make a high of $9,720 over the weekend with the trendline resistance capping it from making any further grounds. While volume was quite robust for Bitcoin, it was ETH that really outperformed (+12%) in the past 48 hours, driven by record ETH options ($20mil) traded on Saturday. For the past few weeks, there has been quite a bit of talk/shill/promoting of ETH, and I think largely driven by a combination of factors that I’ve described earlier (i.e., growing daily active addresses, more than 60 billion gas being used, $7bn in stablecoins and Greyscale’s ETH demand). Other protocol tokens such as Cardano, Zilliqa, and NEO also followed the ETH move, albeit less exaggerated. I still have my doubts on whether an ETH-led or ALT-led rally somewhat lift all boats, my view is that this is a technical retracement from Bitcoin Dominance, re-allocation by funds from BTC to ALTS and new capital inflows (an example: a16z raising their mega $515mil round last month – where will they be allocating some of that capital to?). Besides, this month has plenty of macro event risks (Riots, China/US situation, Reopening risk, Jun 10 FOMC, Jun 18 EU summit, Jun 30 Fed US bank stress, and Fed purchase to decline from $2.4bn to $0.6bn per hour in coming months). Strategy? For those who have got your offers hit at $9.7k good on you, keep that on with a tight stop. There is obviously the risk of a scammy wick through to $10.5k, so you want to avoid that. Keep that short, and I think we should be targeting back to $9.2/$9k/$8.8k. For those chasing the vol move, as mentioned on Saturday morning, I’ve managed to add some vol and would start to cover and turn short once IV hits around 80-90%. Good luck.BTC could break $9,700 decisively to trade for $10,300 and $10,500.. My bias is that we don’t have that volume for BTC to trade through those levels. I still think we head back down lower before a move higher…

A closer look shows you we are just bouncing up and down in this wedge… will be exciting when the bulls or bears can break either side, otherwise respect it until it breaks..

BTC dominance chart shows that ALTs are likely to have more room to run, but how much more? Maybe when BTC hits 63% or so…

Implied vol looks to be traded against the trendline support from earlier this year, which is why I bought some vol over the weekend…

DisclaimerOpinions expressed are solely the analyst’s own and do not represent the views of Matrixport the company.
The views and opinions expressed in this article are those of the contributor and do not necessarily reflect the view of Blockchain.News.

CoinMarketCap Users Says Exchange Rankings Make No Sense

As the number of blockchain-based digital currencies continue growing by the day, there is a need to keep track of them all. This will help market analytics and investors in staying up to date with their choice of cryptocurrency. There are lots of functional cryptocurrency tracking sites, but CoinMarketCap is by far the most prominent. The website tracks the capitalization of various cryptocurrencies by listing prices, available supply (amount of coins/tokens that are currently in circulation), trade volumes and market capitalizations. CoinMarketCap has been put under the spotlight as some of its users have taken to Twitter to point out serious inconsistencies in their rankings, specifically citing the case of the BitMex exchange which inexplicably sits at 175.

Cosmonauts Position

According to Cosmonaut, the CoinMarketCap user who took to Twitter to express his displeasure, the ranking of cryptocurrency exchange BitMex at 175 is simply unjustifiable.

In Cosmonaut’s view, BitMex has the second largest web traffic factor of all the exchanges which according to CoinMarketCap was originally supposed to be how exchanges are ranked. The comments have drawn criticism from analysts, with many indicating that they had long suspected that Changpeng ‘CZ” Zhao would manipulate the rankings, ever since Binance took over CoinMarketCap

Change of Ranking Algorithms

CoinMarketCap has changed its ranking algorithm from the traditional web traffic factor to a more recent Confidence Score. This change was effected since the coin market aggregator was purchased by Binance for an undisclosed sum in April. In this new ranking, Binance ranks as the number one exchange which also calls for more criticisms.

According to data on CoinMarketCap, BitMex has an almost perfect traffic scoreat 960, just 40 points below the maximum of 1000, but also has a liquidity factor of 0. This lack of liquidity, however, as noted by Cosmonaut, does not justify BitMex’s current position. He said in the comments, “Before you say anthing about liquidity factor, I could find 6 other exchanges in the top 50 that have 0 liquidity factor and have under 600 in web factor ranking. What a sham lmao.”

Need for a Review?

Is there a need to take a closer look at CoinMarketCap’s new rankings? The confidence vested by the crypto community in CoinMarketCap must be well guarded. Now that questions are out on the credibility of their algorithms with respect to exchange rankings, a review may help to pacify investors who depend on their ratings to decide which exchange to leverage as they traverse through the crypto sphere

BitMEX Invests in South Africa’s Largest Bitcoin Exchange

In a bold financial move, the parent company of cryptocurrency exchange BitMEX has decided to invest in South Africa’s biggest Bitcoin exchange, VALR.

Bitcoin Crypto Exchange, VALR

The newly founded Bitcoin exchange offers safe digital trading for anyone and popular cryptocurrencies supported by their exchange include but are not reserved to Bitcoin (BTC), Ether (ETH), Ripple (XRP), and Cardano. Although it was only launched in 2019, it has now grown to be a popular international exchange.

100x Ventures Dreams of Going Global

Parent company of BitMEX, 100x Ventures, was hypothesized to have invested in VALR for three key reasons.

The first reason that came into consideration was that it enabled the investment arm to expand its fintech horizons and it allowed the company to grow in overseas markets. Furthermore, 100x Ventures was able to meet the demands of regional exchanges as well as trading services with the new alliance formed with VALR.

Lastly, the investment might have executed by 100 Ventures because of the ever-growing and trending regional Peer-to-Peer (P2P) Bitcoin market. Outside of dominant countries hosting major cryptocurrency markets, Bitcoin exchanges are known to be less well-regulated or not as transparent in their crypto transactions. Consequently, this led to a surge of Peer-to-Peer crypto exchanges, which allowed investors to trade directly with each other.

Places in the world that record huge P2P crypto trading volumes include India, Mexico, and the Philippines, where a proper exchange infrastructure is often lacking. Since there is an increase in demand for regional exchanges around the world, 100x Venture thinks that its investment could be a bridge that joins predominant crypto markets with smaller ones. CEO and co-founder of BitMEX Arthur Hayes commented regarding the alliance with VALR Bitcoin exchange:

“South Africa has an incredibly exciting and fast-growing cryptocurrency ecosystem, and we believe VALR is well-placed to capitalize on future growth of bitcoin trading. In VALR we’re backing not only a successful early-stage business, but a management team with the ability to scale operations significantly.”

BTC Future Continues to Shine for BitMEX

Because of their investment, 100x Venture is now able to gain exposure in a developing crypto market as promising as South Africa. For several years on end, its finance affiliate BitMEX has also remained on top of their game. However, with the newly formed crypto alliance, both the P2P crypto trading platform and its parent company are now able to diversify their business even more, due to regional investments.

BitMEX remains a competitive player in the crypto field. In fact, the cryptocurrency exchange possesses an open interest of $1.02 billion dollars, which consists of double the amount of its competitors, such as Binance and Bybit.

US CFTC Charges BitMEX For Operating Illegal Crypto Derivatives Exchange

On October 1, the US Commodity Futures Trading Commission charged owners of BitMEX cryptocurrency derivatives exchange for illegally operating in the United States.

In a complaint filed in the US District Court for the Southern District of New York, the CFTC brought a civil enforcement action against Arthur Hayes, the CEO, and co-founder of BitMEX, Samuel Reed, the exchange’s CTO and co-founder, and Ben Delo, its co-founder for operating an unregistered trading exchange and violating several CFTC regulations, including failing to implement required know-your-customer (KYC) regulations and anti-money laundering (AML) procedures.

The Legal Battle Presents Rough Moment for BitMEX

The CFTC claims that from at least November 2014 through the present, and under the leadership of Hayes, Reed, and Delo, BitMEX has been illegally offering leverage retail commodity transactions, options, futures, and swaps on cryptocurrencies, thus allowing customers to use leverages of up to100x and giving them the chance to make profits at a high level from minor fluctuations in crypto prices on its platform.

As per the CFTC, BitMEX has failed to implement the key compliance procedures required of financial institutions that impact U.S markets. The agency charged BitMEX with operating a facility for the processing or trading of swaps without having CFTC approval as a designated swap execution or contract market facility. The regulatory body further charged BitMEX with violating CFTC rules by failing to implement anti-money laundering procedures, customer information programs, and know-your-customer procedures.

According to the CFTC, BitMEX recognizes itself as the world’s largest crypto derivatives platform, with billions of dollars of trading volume each day. The commission alleges that the crypto exchange has obtained over $11 billion in Bitcoin deposits and made over $1 billion in fees while conducting most of its business in the U.S and accepting funds and orders from U.S customers.

However, BitMEX has not only failed to register with the CFTC but also failed to implement basic safeguards required by the CEA (Commodity Exchange Act) and CFTCs’ regulations designed to protect the U.S market participants and derivatives markets.

Heath P. Tarbert, chief executive and chairman of the CFTC, said:

“Digital assets hold great promise for our derivatives markets and for our economy. For the United States to be a global leader in this space, it is imperative that we root out illegal activity like that alleged in this case. New and innovative financial products can flourish only if there is market integrity. We can’t allow bad actors that break the law to gain an advantage over exchanges that are doing the right thing by complying with our rules.”

In its ongoing litigation against the owners of BitMEX, the CFTC now seeks restitution for the benefit of customers, civil monetary penalties, disgorgement of ill-gotten gains, civil monetary penalties, and a permanent injunction, permanent trading and registration bans from future violations of the CEA (Commodity Exchange Act).

BitMEX On Receiving End

This is not the first time when BitMEX is facing legal issues. The crypto exchange has been on the receiving end of multiple lawsuits within the last six months or so months, and they cast a long shadow over one of the largest crypto operators in the industry. In March this year, U.K’s Financial Conduct Authority (FCA) blew the whistle on BitMEX for not being authorized to operate in the country. The financial watchdog revealed that the crypto exchange has been operating and offering financial services and products to the U.K residents without being given legal authority by the regulator. BitMEX operating without regulators’ authorization leaves traders without protection.