Whales Moving their Funds out of BitMEX After CFTC Opens Investigation: Report


  • Average value of transactions moving out the cryptocurrency exchange triples
  • Traders have “wary” sentiments towards the current market

Since CFTC announced that it is investigating BitMEX, the average value of transaction moving out of the exchange has “tripled.”

The US Commodity Futures Trading Commission (CFTC) opened an investigation into the Seychelles-based cryptocurrency exchange BitMEX on July 19 to determine whether it broke the law by allowing US residents to trade on its platform.

Could this be because of Roubini and Hayes’ “Tangle in Taipei”? Soon after Nouriel “Dr. Doom” Roubini, a New York professor of economics and anti-crypto criticized BitMEX during “The Tangle in Taipei” earlier this month, the investigation was launched.

Roubini slammed BitMEX for its maximum 100x leverage and that anyone, not just accredited investors are allowed to conduct high-risk trades on the platform.

Moreover, he suggested that though US users aren’t allowed to conduct such kind of leveraged trading, anyone can do so by using a VPN. In response, BitMEX CEO, Arthur Hayes said,

“it makes 100 times leverage, so what?”

Whatever may be the reason, BitMEX is certainly feeling the effects of the CFTC probe.

Average Value of Transactions Moving out the Exchange Triples

Within 24 hours of the breakout of the investigation news, $85 million worth of Bitcoin was moved out of the exchange, wrote TokenAnalyst in its first issue of the weekly newsletter.

The average value of transactions moving out of BitMEX actually, tripled, this large average transaction size, it states is the indication that whales are closing their trades on BitMEX and moving their funds out.

The trade volume dropped by over 50 percent in three days following the announcement. From the high of $5.4 billion on June 18th, it dropped to a low of $2.6 billion on 21st.

Traders have “Wary” Sentiments Towards the Current Market

Data related to the transactions moving to and from exchanges provides a good indication of the supply and demand size of a crypto asset.

While the increase in outflow of a crypto asset from exchanges corresponds to a decreased supply, an increase in the inflow of stablecoins to exchanges communicates an increased demand.

On July 16th, within four days, on-chain volume to and from exchanges decreased by over 70 percent on Bitcoin, Ether, and stablecoins. This week also saw average inflow and outflow amounts and transactions decreasing.

Stabelocins outflow meanwhile, outpaces other token outflows by about 10%, this means portfolio has shifted into fiat-backed digital assets.

This decrease in average transaction value and number of transactions, TokenAnalyst says indicates a “wary sentiment” of the traders.

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