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On Bitmex/CFTC/DOJ... Discussions all over the place. Let me consolidate everything here in this thread...
CFTC knows very well Bitmex blocks US IP addresses. They also know there is no KYC/CIP and any VPN gets around this.
Rumors abound that the CFTC FinCEN DOJ and now the FBI have been investigating Bitmex for years.
Have no misunderstanding... the extra territorial application of US financial law knows no borders and no limits
Bitmex is sitting on $2B in crypto via multisig. All Withdrawals are approved by at least one founder once daily. Not sure what happens to investor crypto if founders in jail.
Bitmex markets are a key reason that we don’t have a US Bitcoin ETF. Their market is easily manipulated by large traders. Not a valid reason for no ETF imo. Just a fact.
The March selloff was exacerbated by Bitmex liquidations. The selloff abated when Bitmex went down. If it hadn’t gone down might we have seen $1k bitcoin?
I think Bitmex should be allowed to exist and that caveat emptor should be their regulatory jurisdiction not the government. However that’s NOT the world we live in so deal with it.
This is a warning shot for defi service providers who think that the regs don’t apply to them. That’s pure nonsense. Lawyer up now.
This episode will likely be a boon for other regulated futures exchanges that offer significant leverage. Gambling is gambling.
If you work in crypto please wake up. If your firm hasn’t lawyered up then you’re working at the wrong firm. Hodlers and lawyers are the big winners here.
In the midterm I think this will have no impact whatsoever on Bitcoin. Short term we might see a bit of a selloff. I’ll be buying any selloff.
“Thanks to the diligent work of our agents, analysts, and partners with the CFTC, they will soon learn the price of their alleged crimes will not be paid with tropical fruit, but rather could result in fines, restitution, and federal prison time." - DOJ release
If that statement doesn’t make DeFi providers wake up than nothing will.
DeFi services are not sufficiently decentralized today to have no central off switch. That means the companies behind them are at risk. Oracles are another problem.
From Bitmex: “We strongly disagree with the U.S. government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously. From our early days as a start-up, we have always sought to comply with applicable U.S. laws, ....”
It appears that BitMex is processing withdrawals in real time which I believe they've never done before.
