The U.S. Commodity Futures Trading Commission (CFTC) is reportedly probing bitcoin exchange platform BitMEX over suspicions of providing service to American traders.
CFTC Investigating Whether BitMEX Serviced US Traders
According to Bloomberg, anonymous sources say the U.S. regulatory watchdog is investigating the popular bitcoin exchange. Reports indicate that the probe centers around BitMEX allowing U.S. traders on the platform.
CFTC to probe whether @BitMEXdotcom broke rules of allowing Americans to trade
— Alistair Milne (@alistairmilne) July 19, 2019
BitMEX isn’t a CFTC-registered platform, thus it is illegal for Americans to trade the crypto derivatives listed on the bitcoin exchange.
The CFTC’s regulatory ambit over cryptos come from a federal ruling back in 2018 declaring cryptos to be commodities. Because of this, the Commission has jurisdiction over any avenue where crypto-based derivatives might intersect with U.S.-based traders even concerning platforms based abroad.
Reacting to the development, a spokesperson for the bitcoin exchange told Bloomberg:
HDR Global Trading Limited, owner of BitMEX, as a matter of company policy, does not comment on any media reports about inquiries or investigations by government agencies or regulators and we have no comment on this report.
The platform’s terms of service do include a list of restricted jurisdictions from whence trading isn’t permitted. Apart from the U.S. other banned countries are Iran, Syria, Cuba, and North Korea to mention a few.
There are reports of user accounts terminated on the platform based on the suspicion that they were U.S. customers. Noted bitcoin bear Tone Vays even tweeted in late 2018, alleging that BitMEX had shut down his account for the same reason.