News of the indictment of BitMEX founders and the charges being brought against the Seychelles-registered crypto exchange have left the crypto community completely wrong-footed. As a result, investors have reacted to the news by quickly shifting their funds out of BitMEX to other exchanges in an attempt to safeguard their assets. According to data by Glassnode, nearly 40,000 BTC have been removed from BitMEX. At current prices, that amounts to approximately $420 million USD.
The Commodity Futures Trading Commission (CFTC) is accusing BitMEX for failing to prevent money laundering and illegally operating in the US, providing trading services to US customers without authorization. Civil charges await the exchange’s founders Arthur Hayes, Benjamin Delo and Samuel Reed, and Reed has reportedly been arrested. Hayes and Delo are currently MIA.
To assuage investor concerns, BitMEX announced in a brief blog post on October 1 that the firm will be contesting the charges. In the meantime, withdrawals are being processed as per usual in scheduled intervals and cycles.
Investors are flocking to exchanges with transparent and strict regulatory compliance that feature proper KYC procedures. BitMEX’s apparent lack of KYC rules is also being scrutinized by the CFTC. In this case, some alternatives for US customers leaving BitMEX would be Gemini, Kraken and Binance and statistics from Crypto Quant reveals that this is indeed the case.
However, while a popular choice for a majority of traders, Binance has also been dealing with regulatory challenges of its own.