Almost $335 Million in Bitcoin Has Been Withdrawn from BitMEX after CFTC Crackdown
The Commodity Futures Trading Commission (CFTC) charged against owners of derivatives crypto trading BitMEX which results in a loss of trust of many users on the exchange. As a result, 32,000 Bitcoin worth $335 million has been washed away in users’ withdrawals.
The withdrawal trend on the part of users has been noticed by Chainalysis’s chief economist, Philip Gradwell, at 430 AM EST on Friday. According to him, $335 million in Bitcoin has been withdrawn which added nearly 25% additional liquidity in the crypto markets in less than 24-hours.
Funds are Shifting on to Other Exchanges
It is also noticed that these BTC funds are shifting to other cryptocurrency exchanges such as Gemini. Some people are moving Bitcoin to the exchanges with personal wallets.
But the CFTC’s charges do not affect all traders and investors as the exchange still has between 135,000 and 170,000 bitcoin. According to The Block Research, the open interest (OI) value does not suffer a lot. However, the open interest value of BTC perpetual contracts has plunged by 16% and it is currently standing at $627 million. Similarly, OI of Ethereum perpetual contracts has declined by almost 37%.
So, CFTC and the U.S. Department of Justice (DOJ) put great pressure over top derivatives exchange by labeling it an unregulated exchange. According to CFTC’s complaint, BiMEX is processing swaps “without having CFTC approval as a designated contract market or swap execution facility, and operating as a futures commission merchant by soliciting orders for and accepting bitcoin to margin digital asset derivatives transactions, and by acting as a counterparty to leveraged retail commodity transactions.”
BitMEX Rejects CFTC’s Allegations
All three owners who are running BitMEX are under charges of CFTC. “Among those charged are company owners Arthur Hayes, Ben Delo, and Samuel Reed, who operate BitMEX’s platform through a maze of corporate entities,” the regulator added.
But the owners of the exchange are determined to fight against CFTC’s allegations. “We strongly disagree with the U.S. government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously, “said a spokesperson of HDR Global Trading Limited, the operator of BitMEX.
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