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Bitcoin is tumbling lower after it was revealed that the U.S. Commodities and Futures Trading Commission (CFTC) is charging BitMEX. BitMEX is a leading crypto derivatives platform based in the Seychelles.

The U.S. regulatory agency, which focuses on derivatives, was rumored to be investigating the company. In 2019, Bloomberg came out with a report suggesting that the CFTC was investigating the company over its potential servicing of U.S. clientele. The exchange does not have the license to operate in the U.S., and the CFTC has taken action against Bitcoin and crypto derivatives platforms in the past.

In the press release announcing this news, the CFTC wrote: 

“The Commodity Futures Trading Commission today announced the filing of a civil enforcement action in the U.S. District Court for the Southern District of New York charging five entities and three individuals that own and operate the BitMEX trading platform with operating an unregistered trading platform and violating multiple CFTC regulations, including failing to implement required anti-money laundering procedures.”

The CFTC names BitMEX’s parent company, 100x Holding, along with limited entities and the co-founders of BitMEX.

According to Jake Chervisnky, a lawyer working in the crypto space, the bigger news is that the three co-founders of BitMEX were indicted on criminal charges. The charges carry a maximum penalty of five years in prison.

Bitcoin Slips on News, Resulting in Millions in Liquidations

Bitcoin’s price is slipping on this news.

According to TradingView, the cryptocurrency is down around $250 since the news was revealed some 20 minutes ago. There was a slight delay in the drop and the release of the news, with the market only realizing its significance minutes after the release was published.

Bitcoin is currently trading for $10,550, posting a loss of 2.5% during Thursday’s trading session.

Altcoins have dropped in tandem with BTC, with Ethereum also losing 3-5% from the levels it was trading at before this release.

Chart of BTC's price action over the past few hours from TradingView.com

According to Skew.com, a crypto derivatives tracker, there was around $8 million worth of BTC derivatives on BitMEX liquidated in the past hour. But as BitMEX is but one of many margin exchanges now, there was likely millions more liquidated.

Community Reacts

The community is reacting negatively to this news.

Many think it has the potential to drive Bitcoin much lower, especially as news and analysis spreads around the importance of this charge for the rest of the crypto industry.

Photo by Aditya Joshi on Unsplash
Price tags: xbtusd, btcusd, btcusd 
Charts from TradingView.com
Bitcoin Slips $200 as CFTC Charges BitMEX Over Derivatives Violations

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