It seems that events are following in the acceleration of the cryptocurrency market.
After the major hack that affected the Kucoin platform and stole nearly $ 281 million, press reports surfaced that the US CFTC was leveling a host of accusations against BitMEX and its owners and that they were operating illegally.
Bitcoin has been progressing relatively well over the past two days, but things have now changed badly.
Bitcoin lost more than $ 400 in value, in less than an hour.
Bitcoin was trading around $ 10900 before falling to where it currently stands at $ 10,508.
This happened almost immediately after news spread that the US Commodity Futures Trading Commission had accused BitMEX and its owners of operating illegally and of having multiple money laundering violations.
According to the official release on October 1, 2020, the CFTC is indicting five entities and three individuals who own and operate the BitMEX trading platform.
They include the owners of the company, Arthur Hayes, Ben Delo and Samuel Reed, who run the BitMEX platform through a maze of corporate entities.
The New York District Attorney also indicted "Reed", "Delo" and "Hayes", along with "Gregory Dwyer", on federal charges of violating the Banking Secrecy Act, as well as conspiracy to violate the Banking Secrecy Act.
It should be noted that data from “ Coinmetrics ” shows that there is approximately $ 2 billion worth of bitcoins currently in BitMEX.
Source: Coinmetrics
The cryptocurrency community is wondering what will happen and how the BitMEX case with CFTC will be resolved.
In addition to all of the above, the safety of the $ 400 million insurance fund has also been questioned, as some press reports stated that the company's chief technology officer, Samuel Reed, had been arrested.
The reaction of the platform management and the crypto community:
BitMEX has already announced plans to fight the charges, but its reputation is sure to suffer following yesterday's actions and charges against it.
Larry Cermak, director of research at The Block, wrote:
The implications of this would be enormous.
Some large forex trading platforms still allow US customers to use their platforms without [KYC] procedures and VPN limits.
That will change very quickly.
CoinShares chief strategy officer Maltum Domiror commented:
It's all just wild.
https://twitter.com/Melt_Dem/status/1311702185303068672?s=19
While Jameson Loeb, co-founder and CEO of Technology at Casa, commented that:
Now we can see if BitMEX's multitasking setup is state-resistant.
Today, like every day, is a good day to withdraw Bitcoin from cryptocurrency trading platforms.
I hope this issue will be resolved.