A $500 Million Bitcoin Exit as BitMEX Gets Labelled ‘High Risk’


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Crypto exchange BitMEX is hemorrhaging liquidity as over $500 million has left the exchange since U.S. regulators filed charges against company executives.

A week ago the Commodity Futures Trading Commission (CFTC) filed charges against BitMEX executives for operating an unregistered trading platform and failing to implement anti-money laundering procedures.

The exchange responded rapidly assuring traders that their funds, which are held in multi-signature wallets, were safe and that it would continue operating as usual. However, that has not prevented the loss of over $500 million in crypto assets from the platform in the week that followed.

Exchange Exodus

According to a CoinMetrics report, BitMEX had its largest daily BTC outflow ever, as investors rushed to remove their funds from the exchange. Around 54,000 BTC were removed from the exchange on October 1 and 2, but by the third, it became clear that they were not locked.

The analytics provider added that these large outflows have dropped BitMEX’s Bitcoin supply to its lowest level since July 2018.

BitMEX BTC supply
BitMEX BTC supply – CoinMetrics

In total, over $500 million in Bitcoin was removed from the exchange over the four day period. It added that despite this exodus, BitMEX still holds close to $1.5 billion in BTC. Over the past 24 hours, $7 million in long positions have been liquidated on the embattled exchange according to Datamish


Open Interest in the XBT Perpetual Contract on BitMEX has also seen a decline falling from around $590 million to around $460 million over the past week. The report added that OI fell but recovered on other exchanges, adding;

“This may be traders that intend to keep the position on and remove some risk by either moving some size to other exchanges or off of BitMEX entirely.”

Chainalysis: BitMEX is ‘high risk’

Crypto security firm Chainalysis has labeled the exchange as ‘high risk’ and warned its clients about possible reputational implications of dealing with BitMEX.

The security company issued the warning to a number of its high-profile clients which include government agencies, banks, and exchanges, informing them that any exchange with criminal charges brought against it should be considered ‘high risk’.

The BitMEX imbroglio adds more fuel to the fires of decentralization and community-driven DeFi governance models that do not have CEOs and executives pulling the strings.

The post A $500 Million Bitcoin Exit as BitMEX Gets Labelled ‘High Risk’ appeared first on Coingape.

Source: A 0 Million Bitcoin Exit as BitMEX Gets Labelled ‘High Risk’

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