After CFTC Files Charges, Chainalysis Labels BitMEX Crypto Exchange as a ‘High Risk’
BitMEX is set to be classified as a ‘high risk’ exchange by crypto intelligence firm Chainalysis; barely a week since its officials, including CEO Arthur Hayes, were indicted by the U.S Commodity Futures Trading Commission (CFTC).
Chainalysis advised its clientele, which includes government agencies, financial institutions, and crypto exchanges that it would consider BitMEX a ‘high risk’ label as of October 13 onwards.
This risk classification update on BitMEX means that Chainalysis clients who leverage the platform’s ‘KYT’ monitoring tool will be able to see both historical and future trigger alerts from the now haunted crypto derivatives exchange. Chainalysis shared the client advisory email with TheBlock,
“Any transfers from October 1st and later should be considered high risk. Compliance teams should also look back at older transfers, but given this change may trigger alerts on thousands of older transfers, it is reasonable to do that incrementally,”
However, a Chainalysis spokesperson said that the company’s clients could opt for their own risk tolerance levels and adjust accordingly. That said, they were keen to highlight it is their duty as a crypto intelligence firm to protect its clients, hence the consideration of ‘high risk’ based on criminal charges filed against a specific firm or its ownership/leadership.
Meanwhile, Arthur Hayes remains at large as BitMEX’s parent firm, HDR Global Trading Ltd, vows to take on the government against the recently filed charges. The accused are being pursued on grounds of violating KYC/AML rules and running an unregistered trading service. While it might be early to predict the future of BitMEX, the exchange is already taking a hard hit on its business. In fact, brutal skeptics like LMAX Group CEO, David Mercer, are of the opinion that recent developments will ultimately affect BitMEX’s going concern,
“I can’t see any significant institution wanting to continue to trade there.”