Traders have withdrawn over 32,200 bitcoin, worth over 4330 million, from the cryptocurrency derivatives trading platform BitMEX after the U.S Commodity Futures Trading Commission (CFTC) announced that it had brought charges against “five entities and three individuals” that own and operate it.
According to data provider Glassnode, in a single hour around 13% of BitMEX’s vaults were emptied as traders withdrew a total of 23,200 BTC from the trading platform, making it the largest hourly BTC outflow BitMEX has seen so far.
Shortly after, another 6,000 BTC were withdrawn from the cryptocurrency derivatives exchange, meaning around 19% of its 170,000 BTC had been withdrawn by traders.
BitMEX is a leading crypto derivatives trading platform that allowed traders to leverage their positions up to 100x. As CryptoGlobe reported, the CFTC has filed an enforcement action against its operators for allegedly executing futures transactions on an illegal platform, offering illegal options, failing to register as a futures commission merchant, failing to implement proper know-your-customer (KYC) checks, failing to implement anti-money laundering (AML) procedures, and more.
It’s worth noting BitMEX implemented mandatory KYC checks in August of this year. In a related criminal action the exchange’s owners, Arthur Hayes, Ben Delo, Samuel Reed, and the exchange’s first employee Gregory Dwyer were charged with violating the Bank Secrecy Act and conspiracy to violate the act. Reed has reportedly already been arrested, while the other three remain at large.
Per the CFTC’s statement, BitMEX received over $11 billion in bitcoin deposits and made over $1 billion in fees operating the platform, with “significant aspects of its business” being made in the United States.
According to the Wall Street Journal, BitMEX’s lawyers intend to fight the allegations. Arthur Hayes’ attorneys Peter Altman and Jim Benjamin of Akin Gump Strauss Hauer & Feld LLP said he worked hard to build a market-leading business and added:
From its early days as a start-up, the company sought to comply with applicable U.S. laws, as those laws were understood at the time and based on available guidance.
Attorneys for Dwyer noted they would also contest the charges, arguing he worked in good faith to follow all applicable laws at BitMEX and to operate the exchange “with the highest integrity.”
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