More than 45,000 Bitcoins have been withdrawn from BitMex after the United States government filed a claim on the exchange and its management. October 1 struck BitMex with two devastating strikes. First, the CFTC and the Ministry of Justice filed charges against the exchange. Shortly thereafter, the US government indicted the founders (including CEO Arthur Hayes). The market responded to this news with a sharp drop in many of the largest Blockchain assets.
This is not the first time that BitMex has contributed to a recession in recent months. The exchange began losing confidence among participants only after the black Thursday blackout that prevented users from trading or receiving their assets. Although users withdrew more than 100,000 Bitcoins in the six months between this episode and these latest claims, the results of the past two days look impressive for size.
Bitmex Bitcoin inflows and outflows from October 1-2, 2020 Source: Crystal Blockchain.
According to Crystal Blockchain, in less than 48 hours, the net outflow from the exchange exceeded 45,000 BTC. Meanwhile, Gemini and Binance appear to be the biggest beneficiaries of these outflows, followed by OKEx and Huobi. More than 20,000 BTC transferred from BitMex to the last four exchanges.
It is unclear whether BitMex will disappear into the abyss of time, like the many failed exchanges before it, or whether the company will survive to trade another day. Lance Morgin, CEO of Blockchain Intelligence Group and a former oversight agent at the Department of Homeland Security, told Cointelegraph that the most likely outcome would be financial sanctions and a promise from BitMex executives not to engage in illegal activities in the future.