Bitmex Accused Of Manipulating The Price of Ethereum
Bitmex is once more in the eye of the hurricane as allegations that the company is manipulating the price of Ether (ETH) have appeared online. According to the allegations, the CEO of Bitmex, Arthur Hayes, told the customers of the exchange, which has leverage margins of 100x, to short ETH.
According to the reports, he affirmed that “if you are a Bitcoin-based speculator, this is the perfect way to punt on the ETH/USD price” and has offered 50x leveraged ETH/USD perpetual swaps using only Bitcoin, in a way that people did not have to touch ETH or USD.
It pretty much looks like Arthur Hayes hates Ethereum and will be handling $3 billion USD in trading volumes for the ETH/USD perpetual swap as a way to sink it. You cannot even bet on the pair with ETH or USD, only BTC. The company has no ETH futures but offers EOS, BCH and Cardano.
While a lot of the situation is still unclear, it is definitely worrisome as it looks like a malicious manipulation of the market. As these exchanges are mostly unregulated and do not have a lot of accountability, the situation is very muddy.
It is almost certain that Arthur Hayes lives in the United States and appears on American TV studios, but Americans are not able to trade on the exchange because it is unregulated. Nobody from the U. S., Canada, Cuba, Crimea, Sevastopol, Iran, Syria, North Korea or Sudan can use the exchange, according to the rules.
If someone lies about their location, the company will shut off the account and terminate the positions that the person has.
However, most of the Bitmex customers are from America and the company is fully aware of it, it simply does not care. After OKCoin and Huobi left last year, the company was the only one to offer margin trading in the U. S.
Now, OKCoin has turned into OKEx and Huobi has come back. These two exchanges are considerably more professional that Bitmex, which is often involved in issues like price manipulation. OKEx offers proper ETH futures with 20x margins and also has options for Bitcoin.
Fortunately, this means that there are alternatives to Bitmex’s shady practices but regulators seem not to be caring that Bitmex is breaking many regulation laws.