The crypto industry was taken aback early today once news got out involving well-known leveraged crypto trading exchange, BitMEX, being scrutinized by regulatory authorities in the United States.
Importantly, news pertaining to this probe came about shortly after top officials inside the US government criticized the nascent crypto markets, with the Treasury Secretary advising that they would be incorporating and putting into effect “very strong” regulations in the near-future.
Crypto Trading Platform BitMEX Under Investigation by CFTC
Earlier today, news broke that BitMEX is at this time being investigated by the United States Commodity and Futures Trading Commission (CFTC) for making it possible for Americans to take advantage of the platform without obtaining the appropriate licensing and registrations.
The news, which was initially published by Bloomberg, came very closely on the back of remarks from top officials within the US government, who gave a less-than-positive perspective on the crypto markets, viewing them as markets swarming with crime and illegal activity.
HDR Trading Limited, BitMEX’s parent company, refused the option to discuss the investigation, but BitMEX CEO, Arthur Hayes, has previously mentioned that the company does ban users from the US who attempt to undermine the company policy– which technically does not enable US residents to access the platform.
It remains unclear as to where this review could lead, or as to what the outcomes might be. But famous critic of both crypto and BitMEX, Nouriel Roubini, noted in a recent tweet that be strongly believes the accusations proposed by the CFTC are just a “fraction of the sleeze going on in BitMEX.”
Crimes probed by @CFTC are a fraction of sleaze going on in BitMEX:
U.S. Regulator Probing Crypto Exchange BitMEX Over Client Trades. Trading platform known for 100x leverage futures contract. Probe comes as regulators ramp up scrutiny of crypto sectorhttps://t.co/X0JDU5Ge46
— Nouriel Roubini (@Nouriel) July 19, 2019
US Government About to Crackdown on the Nascent Markets
The CFTC’s study of BitMEX takes place just 1 day after US Treasury Secretary, Steven Mnuchin, informed CNBC in an interview that the government would commence policing cryptocurrency with “very, very strong” regulations.
Mnuchin then added that the aim of these regulations would be to guarantee that Bitcoin and other cryptos fail to emerge as the equivalent of “Swiss-numbered bank accounts.”
Due to the fact that it is not possible to literally regulate decentralized cryptocurrencies themselves, it is extremely probable that the initial target of regulators will be crypto exchanges, as a number of them have been functioning in the shadows beneath the nose of regulators.
In other nations that have more advanced regulations, such as Korea, federal regulators first started targeted crypto exchanges, compeling them to adhere to the meticulous rules that govern the banking industry.
Although it still remains quite unclear as to when and how the US will tackle slapping the “very strong” regulations on the markets, it is quite likely that more exchanges will begin facing raised scrutiny from organizations like the CFTC in the near-future.
Featured image from Shutterstock.
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