Posted 2 years ago | by @devadmin

After Bitmex was jointly charged by the U.S. Commodity Futures Trading Commission (CFTC) and Department of Justice (DOJ) users of the popular derivatives exchange have requested to withdrawal funds emptying out dnearly 30% of BitMEX’s bitcoin (BTC) balance.

Coindesk reports, the total BTC held on BitMEX addresses dropped from 192,986 BTC on Sept. 30 to 135,619 BTC Tuesday, a 29.73% decline, according to data provided by Coin Metrics. Here’s a chart provided by Coindesk.


As you can see after the announcement of charges and even an arrest of a Bitmex official with open warrants for the arrest of CEO Arthur Hayes and other owners, the Bitcoin wallet balance for Bitmex plumetted.

Last week, Audrey Strauss, the acting U.S. Attorney for the Southern District of New York announced that Hayes, Delo, Reed and Gregory Dwyer (BitMEX’s first employee) were being charged with violating the Bank Secrecy Act and conspiracy to violate the act.

In the press release, the CFTC alleged that BitMEX received some $11 billion in Bitcoin deposits and made more than $1 billion in fees, “while conducting significant aspects of its business from the U.S. and accepting orders and funds from U.S. customers.”

The CFTC charged BitMEX with executing futures transactions on an unregistered board, offering illegal options, failing to register as a futures commission merchant, failing to register as a designated contract market, failing to implement proper know-your-customer rules and other counts, according to the attached legal filing.

The CFTC, is looking to implement a injunction preventing Bitmex from entering into any transactions “involving ‘commodity interests,’” soliciting funds for purchasing or selling commodity interests and applying for registration with the CFTC.

Further, the agency wants the defendants to disgorge all their profits; and the big kicker provide full restitution to its customers; pay civil penalties; and rescind “all contracts and agreements” with any customers if those agreements violate the law.

An HDR Global spokesperson one of the entities involved in Bitmex pushed back against the charges telling Coindesk the following:

“We strongly disagree with the U.S. government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously,” the statement said. “From our early days as a start-up, we have always sought to comply with applicable U.S. laws, as those laws were understood at the time and based on available guidance.”

It’s worth noting that Bitmex implemented mandatory KYC in April of this year after operating without the measure for years.

Update: Arthur Hayes and Samuel Reed have “stepped back from all executive management responsibilities for their respective CEO and CTO roles with immediate effect,” according to a blogpost. Vivien Khoo, current chief operating officer of 100x Group, will become Interim CEO, while Ben Radclyffe, commercial director, will take on a role with greater management of client relationships and oversight of Bitmex’s financial products.