{"id":110222,"date":"2019-07-19T05:00:34","date_gmt":"2019-07-19T12:00:34","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=110222"},"modified":"2020-04-06T01:18:59","modified_gmt":"2020-04-06T00:18:59","slug":"what-cftc-investigating-bitmex-could-mean-for-bitcoin-and-crypto-market","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/what-cftc-investigating-bitmex-could-mean-for-bitcoin-and-crypto-market\/","title":{"rendered":"What the CFTC investigating BitMEX could mean for the Bitcoin and crypto market"},"content":{"rendered":"

The Commodities and Futures Trading Commission (CFTC) has started an investigation into BitMEX, the largest margin trading platform in the crypto market, according to a Bloomberg<\/a> report.<\/p>\n

BitMEX<\/a>, along with other major margin trading platforms, have not allowed U.S. customers to trade derivatives on the platform to avoid scrutiny from U.S. regulators.<\/p>\n

The unexpected move of the CFTC comes after the remarks of U.S. Treasury Secretary Steve Mnuchin and his warning against increased efforts to tighten policies around the crypto sector.<\/p>\n

Going after the biggest fish in the pond<\/h2>\n

Last month, BitMEX achieved $16 billion in daily volume across its derivatives products including the widely utilized bitcoin contract when the price of bitcoin peaked at $14,000.<\/p>\n

\"BitMEX
BitMEX reaches $16 billion daily volume in June as bitcoin price achieved yearly high (source: coinmarketcap.com)<\/figcaption><\/figure>\n

Primarily due to the popularity of its bitcoin contracts, BitMEX has secured its dominance over the crypto market throughout the past several years.<\/p>\n

However, the CFTC is said to be exploring whether BitMEX has facilitated trades for U.S. customers over the years and whether U.S. customers have been able to bypass restrictions set by the exchange by using virtual private networks or VPN.<\/p>\n

A BitMEX spokeswoman told Bloomberg that the company cannot comment on investigations by government agencies.\u00a0The spokeswoman said:<\/p>\n

\u201cHDR Global Trading Limited, owner of BitMEX, as a matter of company policy, does not comment on any media reports about inquiries or investigations by government agencies or regulators and we have no comment on this report.”<\/p><\/blockquote>\n

Why is CFTC going after the biggest bitcoin margin trading platform?<\/h2>\n

Earlier this week, during an official White House briefing, Treasury Secretary Steve Mnuchin stated that with the establishment of the Financial Stability Oversight Council\u2019s Working Group on Digital Assets, various financial agencies including the Securities and Exchange Commission (SEC), CFTC, and FinCEN will vamp up efforts to tighten their oversight on the market.<\/p>\n

Secretary Mnuchin said at the time:<\/p>\n

\u201cThe United States has been at the forefront of regulating entities that provide cryptocurrency. We will not allow digital asset service providers to operate in the shadows and will not tolerate the use of the cryptocurrencies in support of illicit activities. Treasury has been very clear to Facebook, to bitcoin users and other providers of digital financial services that they must implement the same anti-money laundering and countering financing of terrorism, known AMLCFT safeguards as traditional financial institutions.”<\/p><\/blockquote>\n