The U.S. Commodity Futures Trading Commission (CFTC) is allegedly investigating crypto derivatives exchange BitMEX to determine whether it broke the rules by allowing U.S traders onto its platform.
This is based on a Bloomberg columnist’s<a href="https://www.bloomberg.com/news/articles/2019-07-19/u-s-regulator-probing-crypto-exchange-bitmex-over-client-trades"> report</a> on 19th July that revealed the U.S. watchdog (CFTC) is likely scrutinizing the Seychelles-headquartered BitMEX crypto exchange for allowing American clients to trade on its markets.

Neither BitMEX nor the CFTC has<a href="https://mobile.twitter.com/tculpan/status/1152133841303175168?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1152133841303175168&amp;ref_url=https%3A%2F%2Fu.today%2Funconfirmed-cftc-is-investigating-bitmex-crypto-exchange-for-letting-us-clients-trade"> confirmed</a> the information about the alleged investigation, but the author from Bloomberg, Tim Culpan, says the facts are valid even though he cites anonymous sources.
<h2>Why the investigation?</h2>
According to laws that currently govern commodities and futures markets, the U.S. is on the list of countries whose residents are banned from doing trading on the BitMEX platform. Nonetheless, it is alleged that many users have found a way around this ban using VPNs.

According to the Bloomberg report, the probe would be “months-long” to investigate the matter as Seychelles-based <a href="https://www.cryptoknowmics.com/crypto/crypto-leverage-pukkamex-vs-bitmex-interview-explanation/">BitMEX</a> is not registered with the CFTC.

This comes as U.S. regulators continue their clampdown on crypto trading firms in recent months. A good example of scrutiny in the crypto market was when US-based Poloniex<a href="https://www.theblockcrypto.com/tiny/poloniex-continues-to-advocate-for-better-crypto-regulation-as-it-goes-on-a-delisting-spree-in-the-us/"> opted</a> to delist tens of tokens earlier in the year over fears they could be considered securities by the SEC.
<h2>Other accusations of illegal crypto trading by BitMEX</h2>
The news of fresh BitMEX scrutiny comes to a short while after the notorious Bitcoin hater Nouriel Roubini (also known as ‘Dr. Doom’) accused BitMEX and several other digital asset exchanges on profiting from illegal crypto trading and money laundering conducted by criminals and terrorists from Russia, Iran, and other countries.

In 2018, BitMEX came under fire and was forced to close North American users’ accounts following a letter from Canadian regulators notifying the company it was in breach as an unlicensed entity.

Perhaps the most notable incident was at the start of July, when the New York Attorney General purported that crypto exchange Bitfinex and affiliated firm Tether had operated in the state as recently as January 2019.

In defense of these raging accusations, BitMEX CEO Arthur Hayes has<a href="https://www.bloomberg.com/news/articles/2019-07-17/nouriel-roubini-ramps-up-campaign-against-crypto-exchange-bitmex"> defended</a> his startup by stating:

“BitMEX provides safe, fast, professional, and liquid ways for those who see the potential of crypto and to trade and hedge cryptocurrency risk. 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.”

Even so, Bloomberg’s report on BitMEX highlighted that the regulator’s investigations often don’t lead to allegations of misconduct.

CFTC to investigate crypto Derivatives Exchange BitMEX over US trading Breach

Am Wayne, a Blockchain enthusiast and expert in crypto trading. Currently, I cover trendy issues on digital currencies.

CFTC to investigate crypto Derivatives Exchange BitMEX over US trading Breach

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