The United States Commodities and Futures Trading Commission (CFTC) is probing BitMEX, a cryptocurrency derivatives exchange, over suspicions of a violation of regulations, Bloomberg reported on Friday.
The agency is investigating whether the exchange is offering its services in the United States, thus violating federal laws. BitMEX has not received approval from the CFTC and is not allowed to provide derivatives trading services in the country.
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According to the unnamed source of the publication, the watchdog agency has been investigating the derivatives platform for a month already.
*U.S. REGULATOR PROBING CRYPTO EXCHANGE BITMEX ON CLIENT [email protected] under investigation, just two weeks after that @Nouriel v @CryptoHayes Tangle in Taipei.
— Tim Culpan (@tculpan) July 19, 2019
A mammoth in the crypto arena
Registered in Seychelles, BitMEX is one of the largest crypto derivatives platforms, onboarding traders mostly from Asia. It offers leverage up to 100x for its futures contracts.
According to its website, the platform handled $6.75 billion worth of trades in the last 24 hours, while the volume for the last 30 days touched $208.98 billion.
Though BitMEX officially does not provide any service in the US, its chief executive Arthur Hayes revealed in January that it is possible for traders based in the country to spoof their location to trade derivatives.
In January, reports surfaced that the exchange is closing down accounts of traders based in the US and the Canadian province of Quebec amid the tightening of regulatory proceedings.
Meanwhile, Nouriel Roubini, an economist and crypto critic, recently attacked BitMEX, accusing the platform of its involvement in “systematic illegality.”
“We continue to monitor all legal and regulatory developments around the world and will comply with all applicable laws and regulations; we reject any allegations of criminality, manipulation or unfair treatment of our customers, who are at the center of everything we do,” Hayes recently told Bloomberg.