US CFTC Investigates BitMex Crypto Exchange for Carrying US Traders Without Authorization
The investigation is aiming to discover if the exchange offered services to US-based traders, despite lacking the authorization to work with American customers.
BitMex is under investigation from the US Commodities Futures Trading Commission, reported Bloomberg. The investigation aims to establish if BitMex carried US-based traders despite lacking the licenses.
BitMex, a Seychelles-based exchange, is one of the most active Bitcoin (BTC) markets, often swaying the price due to the availability of high-leverage trading and futures markets.
The CFTC considers BTC and digital assets to be commodities, hence has jurisdiction over their trades. However, BitMex is not registered with the agency, and as such cannot offer trading services to US-based customers.
Cryptocurrency exchanges are extremely unregulated, but also hard to investigate, due to the anonymous nature of most trades. Recently, the New York Attorney General opened an investigation against Bitfinex for offering services to residents of the state of New York, without complying with the requirements of BitLicense.
The investigation has been going on for months, so far with an unknown outcome. The CFTC has warned it may come up with a misconduct accusation.
BitMex has taken a bad rap for offering too high a leverage, and for liquidating users in an aggressive manner. While the causes for trades cannot be investigated, the users and their data could yield information about potentially illegal conduct.
The CFTC was also one of the potential regulators to track Libra, Facebook’s eventual digital asset. The news of the BitMex investigation arrives after multiple hawkish messages from US regulators, including a series of tweets from the US President Donald Trump, who shared he is “not a fan” of Bitcoin.
BitMex has also been pointed out as one of the factors for price volatility in the cryptocurrency markets, due to the effect of futures.
The US markets for digital assets are subjected to stricter restrictions in the past months, with market operators either delisting coins or abandoning the market altogether.