BitMEX Volume Plunges 33% in Midst of Purported CFTC Case – EWN

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BitMEX Market Hit Hard Amid CFTC Case

The announcement of an investigation by the United States Commodity Futures and Trade Commission (CFTC) into BitMEX came only two days ago, yet the detrimental effect on the exchange’s popularity has already been substantial.  

As reported by Bloomberg, the CTFC has begun a month-long investigation into BitMEX over high leverage trading options and concerns of US citizens accessing the platform. The US government’s stance on cryptocurrency as commodities led to exchanges falling under the jurisdiction of the CTFC. As the exchange was not registered with the regulatory body – a prerequisite for entrance into American crypto markets – any present utilization of BitMEX by US citizens is considered unlawful by the CTFC.

Present concern centered around the exchange is focused on the massive leverage the exchange permits on an already volatile asset. BitMEX CEO Arthur Hayes recently discussed the business model, describing it as “focusing on degenerate gamblers, AKA retail traders in Bitcoin”.

Within a day of information coming forth on the status of the investigation, a crypto enthusiast tweeted his observation of a 33% decline of trade volume on BitMEX:

Vol has fallen off a cliff. Down 33% today alone on Bitmex.#bitcoin pic.twitter.com/PO1V0wMWDf— Joe McCann (@joemccann) July 20, 2019https://platform.twitter.com/widgets.js

At the same time, BitMEX saw $83 million worth of BTC leave exchange wallets, presumably by American cryptocurrency traders making their way to the site via VPN. 

While other exchanges such as Binance or Huobi offer similar leveraged trading, the extent to which they offer it is nowhere near close to the extreme leverage offered by the exchange, meaning any future concerns are slim.

The main concern stemming from this investigation is the implication of companies being responsible for tracking more than IP addresses in order to comply with geographical restrictions; in fact, depending on the outcome of the investigation, the viability of geoblocking based on IP address as a whole may be threatened.

Title Image Courtesy of Unsplash
The post BitMEX Volume Plunges 33% in Midst of Purported CFTC Case appeared first on Crypto Coins Reports.

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