US CFTC opens investigation against the BitMEX exchange
Regulation

US CFTC opens investigation against the BitMEX exchange

By Matteo Gatti - 19 Jul 2019

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BitMEX is one of the most important exchanges in the world, the platform also offers margin trading to traders. In recent hours it has been found that the United States Commodities and Futures Trading Commission (CFTC) has opened an investigation against BitMEX.

The CFTC is the US government agency that regulates the futures market. It is concerned with securing financial instruments on the markets, promoting their competitiveness and stimulating their efficiency. Overall, the CFTC is concerned with ensuring the integrity of the financial sector.

The reason for the investigation is that, according to the CFTC, BitMEX is allowing US residents to use the platform.

BitMEX under investigation

 

According to Tim Culpan of Bloomberg, the CFTC believes that the exchange has violated US law by allowing residents to register and use the exchange to buy or sell cryptocurrencies.

BitMEX clearly specifies in its policies that US residents cannot register or use the platform.

All countries or jurisdictions that are embargoed by the United States are also cut off.

It’s not the first time

In January, the director of the Autorité des marchés financiers (AMF) of Quebec declared BitMEX’s activities in Canada to be illegal.

“BitMEX is not registered with the AMF and is therefore not authorised to have activities in the province of Quebec. […] We informed this company that its activities were illegal”.

The exchange, which is based in Hong Kong, ceased operations in Quebec. Already at that time, there were rumours about BitMEX not complying with US law, operating without the licenses required by the regulators.

BitMEX, since the fourth quarter of 2018, has notified its users in North Korea, Iran, Syria, Cuba, Sudan and Sevastopol in Crimea to be wary of using the platform because these are jurisdictions with limitations.

The investigations will probably last months and we do not know what repercussions they may have on the exchange. An exchange spokesperson has made the following statement:

“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”.

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