Seychelles registered cryptocurrency derivatives platform, BitMEX has come under scrutiny from U.S regulators according to a Bloombergreport, today July 19.
Citing anonymous sources, Bloomberg stated that the United States Commodity Futures Trading Commission (CFTC) is investigating BitMEX over claims that the exchange is allowing U.S residents to use their platform.
Under current laws, BitMEX which primarily serves the Asian audience does not allow U.S traders on their platform.
Despite that restriction, though, individuals use virtual private networks (VPNs) to skirt the ban, a situation that the CFTC is likely concerned about since their primary responsibility is protecting U.S residents from highly risky investment products.
Apparently, BitMEX could come under the CFTC watchlist since the platform lists crypto derivative products that offer users 100x leverage.
In other words, traders are exposed to substantial risk while borrowing from the firm, a condition that carries increased significance since BitMEX is not licensed by the CFTC to offer such service to Americans.
Bloomberg noted, however, that the investigation by the CFTC has lasted for some months now, and may not be linked with allegations of misconduct by the company.
A BitMEX spokeswoman also declined to comment on the ongoing investigation by the CFTC, telling 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.”
Meanwhile, the latest probe by the CFTC comes amid recent efforts by global regulators to closely monitor the operations of cryptocurrency platforms.
Following the climax of the recent G20 meeting, Stmarket.co reported that the international body approved rules created by that Financial Action Task Force (FATF) for Virtual Asset Service Providers (VASPs).
Those regulations as we also explained would require that these platforms come under nearly the same rules as banking firms, thus restricting the anonymous feature heralded as the strongest characteristic of cryptocurrency.
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