• BitMEX has just been accused of several illegal activities by the CFTC.
  • Co-founder Samuel Reed was arrested this morning in Massachusetts. 

The U.S. Commodity Futures Trading Commission (CFTC) has just accused BitMEX of allegedly facilitating unregistered trading to customers. According to the official report, the CTFC has filed a civil enforcement action in the U.S. District Court of the Southern District of New York charging three individuals that own and operate BitMEX.

The individuals charged include the owner and founder Arthur Hayes, Ben Delo, and Samuel Reed. James McDonald, the Director of the Division of Enforcement stated:

Effective anti-money laundering procedures are among the fundamental requirements of intermediaries in the derivatives markets, whether in traditional products or in the growing digital asset market. This action shows the CFTC will continue to work vigilantly to protect the integrity of these markets

The U.S. Attorney for the District of New York has indicted all three individuals along with Gregory Dwyer on federal charges of 'violating the Ban Secrecy Act and conspiracy to violate the Bank Secrecy Act'. 

According to the CTFC release, BitMEX has allegedly been offering illegal leveraged retail commodity transactions, futures, options, and swaps on cryptocurrencies since November 2014. 

Read the full complaint here.

The complaint also names HDR Global Services Limited, a Bermudian entity that employes personnel for BitMEX since 2018. The report also states that BitMEX has failed to implement Anti-Money Laundering and Know-Your-Customer measures. 

BitMEX has not implemented any AML policies or procedures, which arerequired of financial institutions such as FCMs to prevent or detect, among other things, terroristfinancing or other criminal activity

UPDATE: Co-Founder Samuel Reed was arrested Thursday morning in Massachusetts while the rest remain at large. 

BMA LLC also claims that around 15% of BitMEX's 2019 trading volume is coming from U.S. traders even though the exchange is not licensed in the country. The official team of BitMEX, through HDR Global Trading stated:

We’re aware of a complaint filed by “BMA LLC”, formerly known as ‘Bitcoin Manipulation Abatement, LLC’, in the US District Court for the Northern District of California.  Having reviewed a draft version of their complaint, which is clearly rehashed from information culled from the internet, we confirm we will be defending ourselves vigorously against this spurious claim

Repercussions in the price of Bitcoin and the market

Minutes after the news came out, the price of Bitcoin crash 3.5% within one hour and bears are eying up further downside action. The entire cryptocurrency market wiped $10 billion in market capitalization in less than one hour. A lot of investors are going short, which means betting against the price of Bitcoin or other digital assets.

BTC Longs vs Shorts Chart

btc price

According to a recent report by ByBt, the ratio of shorts vs longs turned in favor of shorts in all exchanges including BitMEX, Binance, or Okex. Although Bitcoin is the most affected currency, the number of shorts also increased for Ethereum, LTC, and XRP.  

BTC/USD 1-hour chart

btc price

Bitcoin was trading around $10,900 before the crash and has now lost the 50-SMA, the 100-SMA, and the 200-SMA as well as several support levels at $10,670, $10,625, and $10,590.  


btc price

The In/Out of the Money Around Price chart by IntoTheBlock shows steep resistance ahead between $10,582 and $10,891. Inside this range, 1.3 million BTC were bought. On the other side, the range between $10,254 and $10,563 is not as strong with only 700,000 BTC bought. If bulls lose this support area, Bitcoin can slide below $10,200 and re-test $10,000.   

BTC/USD daily chart

btc price

On the daily chart, the price of Bitcoin stands at a crucial support level in the form of the 100-SMA. A successful defense of this level would be a good short-term help for the bulls. However, considering the massive selling pressure we are seeing, the most likely scenario for Bitcoin is a dip towards the last low at $10,200.

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Cryptos feed Join Telegram

Recommended content

Recommended Content

Editors’ Picks

Are your bags packed for FOMO Season?

Are your bags packed for FOMO Season?

Crypto markets shows strength to start the second trading week of August, and key levels have been identified. Although it's still early market, current prices may be the ultimate discount in hindsight. BTC follows through on the bullish technicals mentioned in previous outlooks. ETH continues to display strength in the market. XRP seems poised for a rally. Invalidation of the up trend is vital.

More Cryptocurrencies News

Bitcoin price ekes out a 15% move as whales return

Bitcoin price ekes out a 15% move as whales return

BTC reaffirms a triangle breakout to $28,000 after surpassing $24,000. Whales holding 1,000 and more coins grow to 2,051 from 2,040 in a week. Bitcoin price is required to make a daily close above $24,000 to reinforce the move to $28,000.

More Bitcoin News

3 Reasons why Dogecoin price is ready to go ballistic

3 Reasons why Dogecoin price is ready to go ballistic

Dogecoin price sits on the edge of a 26.23% climb to $0.0888. Elon Musk believes DOGE has a larger total transaction capability than Bitcoin. Mark Cuban is confident that Dogecoin potentially has more applications compared to Cardano.

More Dogecoin News

Cardano price edges closer to a massive breakout after months of trying

Cardano price edges closer to a massive breakout after months of trying

A brief technical and on-chain analysis on Cardano price. Here, FXStreet's analysts evaluate where ADA could be heading next. 

More Cardano News

Bitcoin: If bulls lose control here, BTC could revisit $21,000

Bitcoin: If bulls lose control here, BTC could revisit $21,000

Bitcoin price shows an interesting setup that could reveal its next move. On closer inspection,  its technicals support a bearish outlook for the leading crypto.  

Read full analysis