CFTC Investigating BitMEX

Hong Kong-based trading exchange BitMEX is being investigated by the Commodity Futures Trading Commission (CFTC) for possible illegal activities, such as allowing U.S. users onto its platform. BitMEX does not have a presence in the US market. The investigation is expected to last for months and the basic aim of this probe is to find whether BitMEX broke existing rules by allowing the U.S traders on their platform or not.

BitMEX is among the biggest trading platforms for Bitcoin and is popular for unregulated margin trading. It allows traders leverage of up to 100X, enabling them to trade with little downpayment, and has reportedly posted daily trading volumes of as much as $1 trillion.

This latest CFTC action is another instance of regulators tightening their grip on cryptocurrency-related institutions. In the last couple of months, other popular trading platforms like Bittrex and Poloneix removed several tokens from their listings because they were non-compliant with existing regulations. Binance, arguably the world’s biggest cryptocurrency exchange by volume, also banned U.S. users in preparation for an entry into the country. BitMEX itself has kicked several traders off its platform.

BitMEX does not allow U.S users to register their accounts from their original IP addresses and locations but local traders use virtual private networks (VPN) or TOR browsers, which guarantees anonymity, to access the platform.

“HDR 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,” a BitMEX spokeswoman told Bloomberg.