CFTC Charges BitMEX

[luckyflop]

CFTC Charges BitMEX Owners with Illegally Operating a Cryptocurrency Derivatives Trading Platform and Anti-Money Laundering Violations.

Among those charged are company owners Arthur Hayes, Ben Delo, and Samuel Reed, who operate BitMEX’s platform through a maze of corporate entities.

The U.S. Attorney for the District of New York indicted Hayes, Delo, and Reed, along with Gregory Dwyer, on federal charges of violating the Bank Secrecy Act and conspiracy to violate the Bank Secrecy Act.

https://www.cftc.gov/PressRoom/PressReleases/8270-20

[Febo]

CFTC Charges BitMEX Owners with Illegally Operating a Cryptocurrency Derivatives Trading Platform and Anti-Money Laundering Violations.
Among those charged are company owners Arthur Hayes, Ben Delo, and Samuel Reed, who operate BitMEX’s platform through a maze of corporate entities.

Bankers never go to jail. They will hire good lawyers and after 5 years paid few millions penalty and that would be it. Just another day for bankers in the office.

[alicea]

100% agree with what @Febo said the only one who is going to get hurt are small scale investors, I say that because I really think the recent dump in BTC price is because of this news (my opinion). This news triggered a lot of SLs tonight lol

[Tytanowy Janusz]

100% agree with what @Febo said the only one who is going to get hurt are small scale investors, I say that because I really think the recent dump in BTC price is because of this news (my opinion). This news triggered a lot of SLs tonight lol

Yea a lot of rekt investors. Official Bitmex announcmet:

“We strongly disagree with the U.S. government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously. From our early days as a start-up, we have always sought to comply with applicable U.S. laws, as those laws were understood at the time and based on available guidance.”

In the meantime, the BitMEX platform is operating entirely as normal and all funds are safe. To allay any potential customer concerns, pending withdrawal requests were processed at 17:45 UTC, in line with our standard procedures. We will process another off-cycle withdrawal at 08:00 UTC, 02 Oct 2020, and then 13:00 UTC, as usual.

Looks like its storm in a glass of water. SL triggered, weak hands shaked, we can go ATH now.

BTW. If i would have anything on bitmex i would withdraw anyway.

[Princejebs]

I just saw this, they are fully in operation regardless what happen. They announced that Funds are safe, the platform is still running.
https://cryptopotato.com/bitmex-in-response-to-cftc-we-will-continue-to-operate-normally-funds-are-safe/

Bitcoin price most of the time are manipulated by this futures exchange and Bitmex is among the top influence derivative exchange that was responsible for such activities, altcoins are not excluded as well.
Bitmex exchange has always been liquidating traders their fund, this happens most of the time when the market plunge and their website offline mode, they deserve to the queries by regulations body.

[Tytanowy Janusz]

I just saw this, they are fully in operation regardless what happen. They announced that Funds are safe, the platform is still running.
https://cryptopotato.com/bitmex-in-response-to-cftc-we-will-continue-to-operate-normally-funds-are-safe/

Bitcoin price most of the time are manipulated by this futures exchange and Bitmex is among the top influence derivative exchange that was responsible for such activities, altcoins are not excluded as well.
Bitmex exchange has always been liquidating traders their fund, this happens most of the time when the market plunge and their website offline mode, they deserve to the queries by regulations body.

1-Investors manipulate BTC price not exchange.
2-Investors funds are liquidated because of their bad decisions not because of exchange
3-Almost all exchanges are lagging during massive bitcoin pumps/dump. Try to operate correctly with hundreds of orders coming every second and be prepared for this while normally there is 1000 times smaller load.

[tvplus006]

I just saw this, they are fully in operation regardless what happen. They announced that Funds are safe, the platform is still running....

Despite the fact that BitMEX continues to work, there are still risks that participants accounts may be frozen. This explains the fact that members of the exchange derive their cryptocurrency. But despite this, BitMEX increased the number of withdrawals from one to two per day.

[slackovic]

I just saw this, they are fully in operation regardless what happen. They announced that Funds are safe, the platform is still running.
https://cryptopotato.com/bitmex-in-response-to-cftc-we-will-continue-to-operate-normally-funds-are-safe/

Bitcoin price most of the time are manipulated by this futures exchange and Bitmex is among the top influence derivative exchange that was responsible for such activities, altcoins are not excluded as well.
Bitmex exchange has always been liquidating traders their fund, this happens most of the time when the market plunge and their website offline mode, they deserve to the queries by regulations body.

They can say all they want, but the problem is that they have almost 200.000 BTC in 3/4 multisig wallet. That means if one more founder gets arrested, BitMex will lose access to those funds.

[Tytanowy Janusz]

They can say all they want, but the problem is that they have almost 200.000 BTC in 3/4 multisig wallet. That means if one more founder gets arrested, BitMex will lose access to those funds.

4 keys is not equal to 4 persons. They could have shared key location with wife/relatives. It is also only cold wallet that is not neccessary for bitmex to function. And even if this will be temporary.

[tycsols]

I do not understamd this that why all these exchanges especially those that are operating from US do not make any efforts to be regulatory compliant because we l know rules are strict in US about crypto and investments unless you are fully compliant. So i will blame the team and people behind bitmex and i think it is unprofessional behavior and they have risked not only the investors and traders on their platform but whole crypto market is facing negativity due to this.

[South Park]

CFTC Charges BitMEX Owners with Illegally Operating a Cryptocurrency Derivatives Trading Platform and Anti-Money Laundering Violations.
Among those charged are company owners Arthur Hayes, Ben Delo, and Samuel Reed, who operate BitMEX’s platform through a maze of corporate entities.

Bankers never go to jail. They will hire good lawyers and after 5 years paid few millions penalty and that would be it. Just another day for bankers in the office.

I agree that bankers never go to jail, there is just one single problem with that here and that is they are not bankers, they are the owners of a cryptocurrency exchange and they are on the sights of the US government, they could decide to make an example out of them and give them very heavy sentences so those that operate those exchanges and that do not follow their regulations understand very well that they are coming from them and there is no place to hide if they decide to not comply.

[slackovic]

They can say all they want, but the problem is that they have almost 200.000 BTC in 3/4 multisig wallet. That means if one more founder gets arrested, BitMex will lose access to those funds.

4 keys is not equal to 4 persons. They could have shared key location with wife/relatives. It is also only cold wallet that is not neccessary for bitmex to function. And even if this will be temporary.

What's the point of having secret private key if you share it around?

True, it's their cold wallet but people are massively withdrawing BTC from BitMex and it's just a matter of time when their hot wallet will run out of Bitcoin and they will have to transfer some from the cold wallet. Luckily I have never used that exchange, but if I did I would surely withdraw everything from there to Binance or my own wallet.

[Tytanowy Janusz]

True, it's their cold wallet but people are massively withdrawing BTC from BitMex and it's just a matter of time when their hot wallet will run out of Bitcoin and they will have to transfer some from the cold wallet. Luckily I have never used that exchange, but if I did I would surely withdraw everything from there to Binance or my own wallet.

Fair point.

Binance might be at risk too:

Interesting thoughts from Cryptomedication:

"Binance and Bitfinex are Next

You have to be high to think that they aren't.

They're way more egregious than BitMex.

Also, they're part of Crypto Capital Co. the same way that BitMex was (remember, BitMex was the very first exchange that signed up with Crypto Capital Co.)"

But they seem to be more legit in terms of fallowing US law. They kicked US citizens a while ago and launched separate platform for them Binance.us

[luckyflop]

CFTC Charges BitMEX Owners with Illegally Operating a Cryptocurrency Derivatives Trading Platform and Anti-Money Laundering Violations.

Among those charged are company owners Arthur Hayes, Ben Delo, and Samuel Reed, who operate BitMEX’s platform through a maze of corporate entities.

The U.S. Attorney for the District of New York indicted Hayes, Delo, and Reed, along with Gregory Dwyer, on federal charges of violating the Bank Secrecy Act and conspiracy to violate the Bank Secrecy Act.

https://www.cftc.gov/PressRoom/PressReleases/8270-20

According to our data, last night more than 23,200 BTC were withdrawn from BitMEX addresses in a single hour (~13% of all BTC in their vaults).

That is the largest hourly $BTC outflow from BitMEX we've observed so far.


https://twitter.com/glassnode/status/1311944618943098880?s=19

[livingfree]

100% agree with what @Febo said the only one who is going to get hurt are small scale investors, I say that because I really think the recent dump in BTC price is because of this news (my opinion). This news triggered a lot of SLs tonight lol

Very possible that it is.

I do not understamd this that why all these exchanges especially those that are operating from US do not make any efforts to be regulatory compliant because we l know rules are strict in US about crypto and investments unless you are fully compliant. So i will blame the team and people behind bitmex and i think it is unprofessional behavior and they have risked not only the investors and traders on their platform but whole crypto market is facing negativity due to this.

Maybe they never saw this coming. They probably are receiving letters and emails for compliance but they've just ignored it. Well, that's what I think and that's why the sanction came to them and they have to deal with it.

[bttmember]

The news is that the Bitmex team has denied the allegations of anykind of money laundering or terror financing and they have announced that the trading will continue. I like the spirit of the team with this response it will give hope to the investors and traders on the platform and i hope that the issues with the CFTC will be resolved in a professional manner.

[Baofeng]

CFTC Charges BitMEX Owners with Illegally Operating a Cryptocurrency Derivatives Trading Platform and Anti-Money Laundering Violations.
Among those charged are company owners Arthur Hayes, Ben Delo, and Samuel Reed, who operate BitMEX’s platform through a maze of corporate entities.

Bankers never go to jail. They will hire good lawyers and after 5 years paid few millions penalty and that would be it. Just another day for bankers in the office.

I agree but maybe the point is that it's an attack on crypto per se, while they allowed HSBC and JPMorgan to manipulate the market and victimising a lot of traders with their spoofing and just hand over fines of up to $1 billion, which is just a slap on the wrist. I'm guessing that those banks have made a lot of money, more than the fines that they are paying. But with the BitMex issue, they charge them with everything that they can, so it's kinda bias. I'm not defending BitMex here, my point is that CFTC should be at least be fair.

[Willitivity]

I knew it was only a matter of time before Bitmex would be charged to court. For being one of the first exchanges to incorporate derivatives market and futures, I knew they were definitely on the spotlight and in the eyes of the authorities.

Does this news mean that Bitmex can't operate right now?

[btc_angela]

I knew it was only a matter of time before Bitmex would be charged to court. For being one of the first exchanges to incorporate derivatives market and futures, I knew they were definitely on the spotlight and in the eyes of the authorities.

Does this news mean that Bitmex can't operate right now?

Not really sure if they can't operate, but there's a huge dump in the last 24 hours, meaning traders are withdrawing because they are afraid about the future of BitMex. And if this happens, for sure it will be hard for them to operate, so it's either;

(1) temporarily halt their operation until this is over
(2) continue to operate but the risk for traders is going to be huge

The question is, which exchanges are the next target of CFTC?

[hulla]

CFTC Charges BitMEX Owners with Illegally Operating a Cryptocurrency Derivatives Trading Platform and Anti-Money Laundering Violations.
Among those charged are company owners Arthur Hayes, Ben Delo, and Samuel Reed, who operate BitMEX’s platform through a maze of corporate entities.

Bankers never go to jail. They will hire good lawyers and after 5 years paid few millions penalty and that would be it. Just another day for bankers in the office.

You are absolutely right and the lawyer most of them usually choose is Gal Pissetzky etc.
With that been said, it hurts that most crypto currency exchange owner of these days do more warn to crypto than doing something which will yield more profit and exposure to crypto cause acouple of weeks ago it was korean exchange and now it BitMEX