On the morning of October 1, US authorities in New York indicted four executives of BitMEX, the popular Hong Kong-based Wild Card exchange. Despite this, the cryptocurrency exchange continues to work with its services.
BitMEX is one of the largest cryptocurrency exchanges in the world and has a reputation for being “comfortable” with KYC procedures – at least until mid-August this year. In addition, users get a high withdrawal limit with minimal or zero KYC.
After some research, it becomes clear that the company operates a complex international corporate architecture. He promotes his registration in the Seychelles with offices in Hong Kong and New York. Although from a legal point of view it is likely to be challenged. The company was often ranked among the five largest international stock exchanges.
How serious are the allegations?
The United States has a habit of including soft charges in arrest warrants to obtain international extradition of persons wanted under US law. Additional charges apply after the defendant enters the United States. The reason for this move is that not all countries recognize these complex US laws, especially with regard to money laundering and economic crime. Extradition can take place under light laws, with charges being improved after the person arrives in the United States.
Read between the lines, documents released by the authorities indicate that stricter accusations may follow, including violations of international sanctions. The rumor mill in New York indicates that federal authorities believe that BitMEX may have been the most likely foothold for countries such as Iran and North Korea to end cryptocurrencies. In that case, giving them this opportunity means a significant commission. Violation of international sanctions is a major problem, especially for the United States.
During the day, as the news spread, the price of bitcoin (BTC) fell, and many users began withdrawing funds from the stock exchange. Some experts have tried to calm the market throughout the day, assuring people that BitMEX is not going anywhere (think it is too big to fail).
In addition, a representative of HDR Global Trading Limited, a BitMEX company, addressed the New York Times:
“We strongly disagree with the tough decision of the US government to take these allegations, and we intend to defend these allegations vigorously.”
No matter how true this is, given the time when the announcement was made, BitMEX may have tried to loosen the market more than it positioned itself.
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The future of BitMEX
The reality of the situation is that if she is found guilty, it is likely that stock market funds will be used to pay compensation to victims of money laundering and other crimes. What this really means is to freeze accounts, stop trading and even blacklist the company altogether and sell international assets to compensate the victims.
At the time of writing, the authorities have arrested Samuel Reed, one of the four accused, in connection with the arrest warrants. The other three are still missing.