- 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.
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.
Not the first time BitMEX was accused of illegal activities
Back in May 2020, the derivatives exchange was also accused in court of facilitating a 'myriad of illegal activities' according to a lawsuit filed by BMA LLC in the United States District.
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
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
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 IOMAP Chart
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
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.
Recommended Content
Editors’ Picks
Shiba Inu price stagnancy brings investors’ losses to a 28-month high

Shiba Inu has been rather dormant these past four weeks, which is bearing a negative impact on the investors. The meme coin market has been struggling to make headlines as the lack of increase in altcoin’s market value has left investors in peril, which is now driving them to pull back and wait until SHIB starts rising again.
LDO sees lowest cumulative volume in ten months as Lido DAO price struggles to breach key barrier

Lido DAO price is up over the past day as the market shifted its stance despite the SEC announcing a delay in the spot Bitcoin ETF applications of BlackRock among other applicants. However, this one-day rise is not enough for the likes of LDO that have been failing in recovering for a few weeks now.
THORChain leaps 12% with soaring open interest as RUNE targets a peak of its current range

THORChain is testing a crucial multi-month obstacle after a remarkable climb. The move has completed the altcoin’s recovery rally following the 15% fall of September 27. RUNE has outperformed the broader market, with Bitcoin and Ethereum recording only up to 3% in daily gains.
Chainlink and Australia’s ANZ Bank issue AUD-stablecoin to successfully test interoperability

Chainlink put itself on the map with the help of its real-time data-feeding Oracles and is now in the spotlight for its interoperability protocol. Through this protocol, the blockchain project intends to not only connect two or five chains but also create the world’s largest liquidity layer, starting with Australia’s second-largest bank.
Bitcoin: BTC recovery rally could be bull trap in disguise, here’s why

Bitcoin (BTC) price remains unfazed even after the multiple spot BTC ETF delays from the US Securities & Exchange Commission (SEC). But investors need to be careful with the ongoing BTC rally as it could be a trap for early bulls.