According to the recent news reported on last Friday by Bloomberg’s columnist Tim Culpan, BitMEX, one of the prominent Bitcoin margin trading exchange based out of Seychelles, is undergoing investigation by the US regulator CFTC, the Commodity Futures Trading Commission. The suspicion is whether the exchange has allowed the citizens of the United States to use its platform for trade, in point of fact that it is not registered with the agency.
The US regulator, CFTC considers digital currencies like Bitcoin as merchandise and to trade with these merchandise in the country; one needs to get registered with the agency. An investigation has been commenced, which could take months-long of time to evaluate whether any rule has been broken by the exchange, said by an insider who asked his name to be kept private. It is to be noted that the investigation has not been made public yet by the regulator.
When asked for comment about the supposed investigation from the exchange’s authority, a spokeswoman of the exchange maintained that they are not obligated to speak about any unofficial investigation against them by any government agency. In her own words:
“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, however, shed light on the exchange’s policy, during an interview in January, to remove any individual who contempt with the company rules barring US nationals and residents. Mr. Arthur said that,
“However, it is possible clients masked their location by using virtual private networks to assign their computer an Internet protocol address from a BitMEX permitted country, tricking filters put in place.”
On the other hand, BitMEX exchange has also ensured publicly that trading on the platform is prohibited by the U.S. citizens or the Canadian province of Quebec, via its website under its term of service.
Seeing at the above facts that the company has taken to remain transparent and following the law from all the fronts, it is uncertain whether this supposed inquiry will yield any fruits at all.
The company has also been on the receiving end of criticism in recent times by a noted economist from the New York University, Nouriel Roubini, who accused the exchange “of being involved in systematic illegality,” according to Bloomberg.
He maintained his accusation on the basis that as the firm provides cryptocurrencies’ trading with up to 100-times leverage and other services such as futures and swaps, the level of risks involving its traders to get exposed becomes high.
Whereas, Arthur Hayes, the CEO of BitMEX, rejects any allegation of such kind and ensures that the firm does not trade against their client. In his recent talk with Bloomberg, he said:
“We continue to monitor all legal and regulatory developments around the world and will comply with all applicable laws and regulations; we reject any allegations of criminality, manipulation or unfair treatment of our customers, who are at the center of everything we do.”
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