Arthur Hayes’ BitMEX Under Investigation By CFTC For Illegal Crypto Trading; Was Nouriel Roubini Right?

Per the latest reports, crypto derivatives exchange BitMEX is now under the scrutiny of the regulators.

The US Commodity Futures Trading Commission (CFTC) is investigating cryptocurrency exchange BitMEX, reported Bloomberg.

Citing people familiar with the matter, Bloomberg stated that the CFTC is looking into whether the Seychelles-based exchanges broke the rules by allowing American customers to trade on the platform, which isn’t registered with the agency.

The probe is ongoing but it’s worth noting that the investigations by the regulators don’t always lead to allegations of misconduct.

BitMEX Is A Seychelles Registered Exchange With Offices In Hong Kong And San Francisco

Back in January, BitMEX CEO Arthur Hayes said in an interview that the exchange removes anyone who disregards the company rules barring US residents and nationals. However, it isn’t hard for clients to mask their location by using virtual private networks (VPN) to assign an Internet Protocol address to their computer from a BitMEX permitted country, Hayes said.

There has been “no comment” from the BitMEX on this matter while CFTC declined to comment.

The exchange has put up a notice on its website that people who are residents or citizens of the US or the Canadian province of Quebec are prohibited from using the platform.

Founded in 2014, BitMEX is a Seychelles registered exchange with its main office in Hong Kong. It also has an office in San Francisco. BitMEX is among the top exchanges by reported volume, as per the data from Coinmarketcap.

Regulatory Oversight Increasing

Though CFTC’s turf is largely limited to crypto derivatives and manipulation and fraud in the spot market, the regulator has staked out a leading role in overseeing digital currencies and has also sued firms for violating derivative regulations both at home and abroad when US clients are involved.

In the past few weeks, the regulatory oversight is increasing as the discussion around Bitcoin and cryptocurrencies take center stage in the Senate.

Most recently, we have seen from President to Treasury Secretary and the Fed Chairman making a commentary about the cryptocurrencies.