BitMEX could be in a lot of trouble with the U.S. Commodity Futures Trading Commission (CFTC). As reported by Bloomberg, the agency is investigating the crypto exchange on the chances that it might have allowed trading without first registering their platform.
Although BitMEX strictly does not allow U.S. residents or nationals to trade on their platform, there are concerns that they might be able to anyway. In January, CEO Arthur Hayes commented that employees who knowingly allowed Americans to use their services would be dismissed, hinting that it was a potential concern.
In the same interview, he noted that through a VPN which can mask a user’s location, it’s possible that American residents could have circumvented geoblocking, permitting them to use the service. That’s the same method that Binance CEO Changpeng Zhao hinted American users could use when they were blocked from his exchange.
Knowingly letting Americans circumvent local laws and regulations would be a bit of a problem though, and while it’s mostly speculation, that appears to be what the CFTC is investigating with BitMEX now. As Bloomberg noted though, the simple existence of an investigation doesn’t indicate wrongdoing, and it could be that the investigation would be dropped without any charges being made. The CFTC hasn’t made any comments on the matter to indicate what direction this is going in.
It does provide a pretty clear signal to the industry that playing cute with the law won’t cut it anymore. As Treasury Secretary Steven Mnuchin recently noted, the U.S. is done allowing crypto companies circumvent American laws, and the whole world will have to start cracking down on the money laundering and terrorist financing that can take place on crypto exchanges.