Seychelles based BitMEX has recently made changes to its trade restriction list. The crypto-derivatives trading platform also has branches in Hong Kong and Bermuda. Yesterday, the crypto exchange announced three new important additions to the list. BitMEX with its parent company- HDR Global Trading Limited (HDR), have added Hong Kong, Bermuda, and Seychelles to this list. It would mean that from now onwards there will be a total trade access restrictions for these countries.
The trade restriction list of the crypto platform had the United States, the province of Québec in Canada, Cuba, Crimea and Sevastopol, Iran, Syria, North Korea, and Sudan already, to which Hong Kong, Bermuda, and Seychelles have joined the club.
The reason behind the jurisdiction:
But why has the crypto exchange taken this step? Is it in a reaction to something? Well, as per the official announcement made by BitMEX, it is a well thought of, proactive decision. The crypto-derivatives trading platform wants to lead the industry by example. It has, therefore, decided to restrict the trade in the countries where the ‘HRD-affiliated employees and offices are located.’
As per the official announcement-
The increased involvement of regulators with all the major players in the industry is not only to be expected, it is to be welcomed. It is the mission of good regulators to ensure that honest citizens are not being cheated. […] For this reason, we have decided to restrict access to BitMEX for users in the jurisdictions in which HDR-affiliated employees and offices are located.
What financial impact will this decision have?
As per the official announcement, there will be no financial impact on the businesses and it won’t affect many people either. The exchange has taken special care to reach out to those people who will be affected by the jurisdiction.
Leading the crypto industry by example:
The crypto exchange has made it very clear that this decision is a proactive decision made while keeping the goals of the exchange in mind. The exchange wants to lead in the innovation sector as well as in the departments of safety, trust, transparency, and overall standards. The exchange has focused on increasing the transparency levels of the system by this step. Another reason is that the exchange wants to ensure the third parties about its safety levels in terms of trading.
When it comes to plans, the exchange had the following to say. As per the official blog announcement by BitMEX–
We are showing third-parties why we believe BitMEX is a safe place to trade; how our innovative contracts are structured; why we keep an Insurance Fund; how auto-deleveraging is orderly and fair; how we know all accounts are 100% backed; and why we believe BitMEX has one of the safest custody solutions in the world.
Further, the exchange revealed that currently, the team is busy working on audits of Insurance Funds, trade contracts, market activities.
ASA and CFTC scrutiny over BitMEX:
On the other hand, the crypto derivatives exchange was making a round of news due to the complaints made by the U.K. Advertising Standards Authority (ASA) due to a BTC ad (placed on 3rd Jan) aired by the platform. The complaints were on the grounds of failure of showing the risk involved in the investment, the return on the investment was over-blown in the ad, and lastly, the accusation on the exchange’s ad was that it was misleading. The ad was aired on the occasion of the tenth anniversary of mining of the first block of BTC.
As per the ASA, the ad titled- “Two sides of the coin: the bifurcated near-future of money” was printed in a national newspaper with details such as graphs, a full-page article written by the CEO and co-founder of HDR Global Trading Arthur Hayes, came with a footer which said-
“Thanks, Satoshi, we owe you one. Happy 10th Birthday, Bitcoin.”
On the other hand, the Seychelles-based crypto derivatives exchange has also been questioned by the U.S. Commodity Futures Trading Commission (CFTC.) The probing is done to check whether the crypto exchange has permitted the U.S traders to use the platform of not.