Bitmex in disarray as feds look into loose operations


The shakeup at Bitmex has left staff playing musical chairs, and the former CEO on the road, being sought by law enforcement professionals, after federal agencies declared the exchange has been lax on money laundering and not generally compliant with U.S. finance law.


October 1, the news broke in the New York Times that leaders of the exchange had been indicted and that characters including Bitcoin magnate Ben Delo and Wharton grad and market maker Arthur Hayes were to be arrested and charged.


When Bitmex was founded in 2014, it seemed to be a promising exchange.


The biggest headlines made by the exchange in recent years involved Hayes going head-to-head with economist Nouriel Roubini, known as “Dr. Doom” in cryptocurrency circles, who argued the kinds of laxity that eventually landed Hayes in the hot seat.


In fact, it’s now reported that federal agencies began some investigations just days after that discussion in July of 2019.


While the government has laid out some of its criticisms of Bitmex, questions still remain. The sins of the exchange’s leaders seem to be more than a case of lack of action then any deliberate criminal action, and lawyers for the defendants are likely to argue that the charges being applied are subjective and possibly politically motivated.


On the other hand, it seems that some of the folks over at Reddit had been pretty vocal about the shadiness they perceived at the exchange.


“So you heard that Bitcoin tanked to new lows just 63 days prior to the Halving and you’re confused right?” wrote u/Bitttburger seven months ago in a post titled: When are the owners of BitMex going to Jail?” Well technically it didn’t. Its just BitMex again, pulling their crap … So basically they wait until there are $100 million worth of longs sitting there, see dollar signs in their eyes, and then slaughter everyone for their own financial gain. And it affects the entire Bitcoin market, and the entire altcoin market adversely as a result. Surely there must be some rich, powerful people out there who are fed up with this bullshit and forming a lawsuit in conjunction with the SEC to have BitMex and its nonsense stopped once and for all.”

That’s just one example. Now, those “rich, powerful people” are doing something. The Bitmex deal is a big deal in the cryptocurrency world, so take note if you have related holdings.