BitMEX is under investigation by CFTC for allowing U.S. citizens to trade

19 Jul, 2019 | Updated: 19 Jul, 2019
by David Robb
BitMEX is under investigation by CFTC for allowing U.S. citizens to trade

The Commodity Futures and Trading Commission (CFTC) is investigating BitMEX. A report by Bloomberg claims that the top crypto derivatives platform is suspected of illegally offering trading to citizens in the U.S.

The crypto space has been under increasing scrutiny in recent weeks and months, primarily due to the announcement of Facebook's new Libra project, and the concerns raised by U.S. authorities regarding its potential impact. BitMEX has also been on the defensive, with notorious crypto-sceptic Nouriel Roubini publicly debating Arthur Hayes, the CEO of the crypto derivatives platform.

BitMEX's business model, offering what is effectively a gambling platform where traders can buy crypto futures contracts with often huge amounts of leverage, has been criticized by many within the crypto community, as well as Roubini. Now the company may be facing serious action from one of the U.S.'s leading financial regulators.

The CFTC oversees the trading of futures in the U.S., and any crypto platforms that want to offer derivatives contracts need to gain its approval. It recently approved BTC futures from trading platforms ErisX and LedgerX. An investigation that it has apparently been pursuing for months is attempting to determine how easily BitMEX was to access for American users. Although IP addresses in the U.S. are blocked by the site, this is easily bypassed via VPN software. 

A report released back in 2018 by the New York Attorney General insisted that "platforms must take reasonable steps to unmask or block customers that attempt to access their site via known VPN connections". A spokesperson for BitMEX, which is registered in the Seychelles, told Bloomberg that they couldn't offer any comment on the ongoing investigation.

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