- The accounts are being shut down amidst regulatory fears
- BitMEX trading volume in 2018 stood at $965 billion
- The exchange offers perpetual bitcoin contracts which offer 100 times leverage
According to a report by South China Morning Post published on January 15, 2019, BitMEX, a Hong-Kong-based cryptocurrency has shuttered down the accounts of its US and Quebec, Canada, based clients amidst fears of stifling regulatory environment.
Unclear Regulations Suffocate the Crypto Ecosystem
Regulations have long been one of the chinks in the armor for digital currencies. Regulatory bodies the world over are not rushing at all to form a supervisory infrastructure for cryptocurrencies, and the same seems to hurt its development.
However, the onus of the clampdown cannot be put solely on regulatory bodies. Rampant scams and exchange hacks have necessitated the need for a firm and conducive regulatory ecosystem for businesses operating in the nascent industry.
BitMEX is one of the largest crypto exchanges in the world. This is evident from its 2018 trading volume which stands at a staggering $965 billion.
The exchange is closing the accounts of its Quebec-based clients on account of the local financial regulator’s directive in early 2018. The province’s regulator Autorité des marchés financiers (AMF) had sent a directive to BitMEX to close all accounts linked to Quebecois, saying it is not authorized to provide trading services.
“BitMEX is not registered with the AMF and is therefore not authorised to have activities in the province of Quebec,” AMF’s director of media relations told the Post.“We informed this company that its activities were illegal.”
Notably, South China Morning Post reached out to the US SEC and Arthur Hayes, co-founder, and CEO of BitMEX. They were, however, declined any commentary from both the parties.
With regard to the clampdown in the US, reasons are still unclear. However, it won’t be far-fetched to assume that the US SEC’s continual crackdown on crypto-related entities and push towards classifying digital currencies as securities might have sparked the fire for BitMEX.
The US SEC Continues to Haunt the Crypto Industry
Mainstream adoption of cryptocurrency faces a huge hurdle in the face of regulatory bodies. Decentralized digital currencies like Bitcoin flirt with the idea of giving power back to people; something which power-houses around the world might not be very fond of.
Bitcoin ETFs still seem a distant reality as recently highlighted by the US SEC chief, Jay Clayton.
On November 16, 2018, BlockchainReporter informed its readers about how the SEC commenced an investigation into popular crypto lending platform SALT and its former director Eric Voorhees.
However, these discouraging steps by the American watchdog haven’t impacted the enthusiasm among crypto proponents. BlockchainReporter reported on January 12, 2019, how Bitwise filed an application with the SEC seeking to establish a bitcoin ETF.