A Bloomberg report citing an insider source claimed that the Seychelles-based BitMEX cryptocurrency exchange is being investigated by the U.S. Commodity Futures Trading Commission (CFTC). The report suggests that the CFTC is investigating whether the exchange allowed US consumers to use its platform.
As per the CFTC guidelines, cryptocurrencies like Bitcoin fall under the bracket of commodities and any form of derivative of these cryptocurrencies like Bitcoin future can only be availed under certain jurisdiction and with the permission of the CFTC. The agency is looking into whether the exchange has offered such trading services to the US citizens without the necessary license.
The official website of the exchange has several crypto products listed for trading which it might not have the due permission for. The website has listed trading option for cryptocurrencies with 100x leverages, future trading as well as swapping service.
The Bloomberg report suggests that the ongoing investigation might not lead to any kind misconduct allegations, however the CFTC declined to comment on the issue when reached out by the news publication.
The Nouriel Roubini factor
Interestingly, days before Bloomberg report about an alleged investigation surfaced, Nouriel Roubini had attacked BitMEX saying the exchange “may be openly involved in systematic illegality,” However, this aspect of news was also reported in the same Bloomberg report.
Roubini believed the exchange is exposing its traders to high-scale risks by putting such high leverages trading options. He even claimed that the exchange might be neglecting the anti-money laundering regulations as well.
BitMEX CEO Arthur Hayes had denied any such allegations of putting their platform’s traders at risk, he recently said,
“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.”