After initial reports that the CFTC had begun to investigate BitMex under customer protection rules, the latest data from TokenAnalyst suggests that this has been sufficient to scare users into removing their bitcoin (BTC) from the platform, July 20, 2019. Many competitors to BitMex such as Deribit and FTX are expected to benefit from this.
BitMex in the Spotlight
After Arthur Hayes’ rumble with Nouriel Roubini, the latter felt their videotaped debate was not enough and wrote a detailed blog post depicting his thoughts on BitMex. Shortly after this, BTCManager reported that the CFTC was investigating BitMex for onboarding American customers without following necessary protocol.
This sparked a run on BitMex as TokenAnalyst revealed a mere $12 million of inflow versus $85 million of outflows. Till date, nothing moves the cryptocurrency market like regulatory issues and this has become more evident over the last few months. Bitcoin has been quite choppy over the last few weeks and this has reportedly solidified the possibility of the SEC once again rejecting Bitcoin ETF proposals.
There is no doubt the news of the investigation is scaring investors as it did when Bitfinex was accused by the New York State Attorney General of shadow banking and being careless with customer funds. In the last month, everyone has more or less forgotten about the whole Bitfinex saga despite it being the hottest topic in crypto for the best part of two weeks.
Regulation is the most important externality in crypto and this is being proven time and time again. Regulators, despite their lack of direct control, have the most influence on cryptocurrency markets given the immaturity of the technology.
Any Reason to fear Regulations? » Read Full Article «