On the morning of Oct. 1, the United States government authorities in New York issued indictments for four of the senior team of BitMEX, the famed “wild card” exchange based in Hong Kong. Despite that, the crypto exchange still continues to operate its services.
BitMEX is one of the world’s largest crypto exchanges and has a reputation for being notoriously “relaxed” on Know Your Customer and ID procedures for its users — at least until mid-August of this year. Additionally, users are allowed a high withdrawal limit with little to no KYC.
After doing some research, it is clear that the company operates a complex international corporate structure. It promotes its registration in the Seychelles with offices in Hong Kong and New York. Although, from a legal point, this could most likely be disputed. The company has often been in the top five exchanges internationally.
How serious are the charges"_blank" href="https://cointelegraph.com/bitcoin-price-index" target="_blank" data-amp="https://cointelegraph-com.cdn.ampproject.org/c/s/cointelegraph.com/bitcoin-price-index/amp">BTC) price dropped, and many users began making withdrawals from the exchange. Some experts tried to quiet the market down as the day went on by reassuring people that BitMEX isn’t going anywhere (with the belief that it is too big to fail).
Adding to this, a spokesperson for HDR Global Trading Limited — one of the BitMEX companies — quoted to the New York Times:
“We strongly disagree with the U.S. government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously.”
Regardless of how true that is, if to look at the timing of the statement, BitMEX may have been trying to ease the market more than take a stand on their situation.
The future of BitMEX
The reality of the situation is that if found guilty, the assets of the exchange will most likely be used to provide restitution to victims of money laundering and other crimes. This realistically means the freezing of accounts, suspension of trading, and even blacklisting of the company in general, as well as selling international assets to pay back victims.
At the time of writing, one of the four indicted individuals, Samuel Reed, has been arrested by authorities in connection with the warrants. The other three remain unaccounted for.
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