Bitmex is in hot water!

If you're a Cryptocurrency Trader..

You've probably experienced this!

Bitmex is one of the worlds largest Cryptocurrency derivative exchanges. There has been a new lawsuit filed by BMA LLC in the Northern District of California. Today we're going to review the allegations of racketeering, money laundering, wire fraud, among many others against Bitmex.

Forbidden Fruit:

Several sources have stated that almost 15% of the total volume traded on BitMEX in 2019 was completed in the United States of America. This suggested that $3 Billion dollars in money transfers daily are occurring without proper licensing in the US.

The primary problem here is that the BitMEX platform is banned in the US. Policy makers and the SEC are under the opinion that this platform is not in the best interest of their citizens, and therefore it can't be used. However, with lack of KYC and adding a VPN, this platform can be accessed from anywhere.

Washing Machine goes Brrrr:

Another accusation implies that the creators of Bitmex allow and facilitate money laundering to take place. The platform does not require registration or any KYC information. This would allow any user to sign up for an infinite number of unverified accounts. It is important to note that there is no trading limits, nor withdraw/deposit limits for accounts on this platform.

Order Submission Error:

This is just one of the reasons why Performante switched from BitMEX to Bybit many years ago. The lawsuit filed alleges that BitMEX deliberately weaponizes error codes and server freezes. Although unproven, it is implied during high volatility times, BitMEX accepts or rejects specific orders to maximize effective liquidations.

Liquidations are events where a user has all of their capital lost. In instances where an individual has used leverage (amplification of buying power), and the net loss equals 100%. The position is liquidated to protect the user from greater  than 100% loss, and protect the company from potentially unpaid debts.

Why is this platform allowed?

As mentioned earlier, the USA has made their stance on the platform clear. However, why haven't other countries followed suit? The answer isn't very clear. The head quarters of BitMEX is located in Mahé which is an island in  Seychelles. By doing this, the company experiences some benefits..

    • No requirement for KYC information.
    • Different financial tax laws. 
This being said, a lot of different countries have taken steps to protect their citizens from this potentially malicious platform:
    • Entire United States of America
    • People's Republic of China
    • Quebec, Canada
    • Bermuda, Cuba, Crimea and Sevastopol
    • Syria, North Korea, Sudan
    • Republic of Seychelles

      Does this change your perception?

      Having a broker you can trust is crucial for successful trading. This is not the first incident that people have had with this platform, and it likely won't be the last. Want a more reliable and professional experience? I encourage you to check out Bybit! 

      Bybit offers a very similar functionality and purpose, if you want to learn about the specifics you can find more information here. Alternatively, if you're ready to take the plunge I encourage you to click here.

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