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Bitmex Execs Allegedly Looted $440 Million: DOJ Investigations

Cryptocurrency derivative platform BitMEX is on the brink of collapse amid mounting regulatory pressures. The futures trading exchange is facing charges of not complying with regulatory laws. Reports that Bitmex execs allegedly’ looted $440 million has all but dented the company’s image fuelling mass cash outflows from the exchange.

Arthur Hayes BitMex

HDR Holdings, the operator of the exchange, has already confirmed the stepping down of founders Arthur Hayes and Samuel Reed, who are at the center of the fraud allegations. The executives are also accused of illegally operating the exchange.

The exchange futures premium market has been the hardest hit amid the regulatory probes. Concerned that the exchange could go down or closed permanently, traders have opted not to buy or sell in the exchange. Likewise, premium investors are no longer willing to participate through BitMEX contracts.

Bitmex futures price action is already lagging as traders lack the drive to participate. Liquidity levels have reduced significantly as the exchange future remains uncertain. Investors withdrew over 40,000 bitcoins from the exchange after the CFTC brought a charge against the crypto exchange and in response to Bitmex execs allegedly’ looted $440 million.

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BitMex Prospects

The commission has filed a civil action against the Seychelles based crypto for operating an unregistered trading platform. The exchange is accused of violating regulatory laws. Immediate reports indicate that mass withdrawals from the exchange have ended up in Gemini, Kraken Coinbase, and Binance.

The lawsuit also alleges that Arthur Hayes BitMex colluded with Ben Delo and Reed to loot about $440 million as proceeds of various nefarious activities. The filing also alleges that the defendants were aware of the Department of Justice and CGTC investigations.

The charges and bad reputation should only accelerate BitMex users into withdrawing funds from the exchange. While it is still business as usual in the exchange, it is still in the air for how long the exchange will remain operational. The fact that the exchange faces solvency risks means it is unlikely to recover as premium investors stay clear of the exchange.

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Ruchi Gupta

Ruchi Gupta covers various beats from finance to technology and from lifestyle to hobbies. She has an MBA in Finance. Ruchi enjoys writing on celebrities and political news. She likes traveling and exploring places.

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