Following the CFTC's accusation that BitMEX allowed illegal trading of cryptocurrencies and other assets, users of the exchange began withdrawing their Bitcoin funds en masse.
Despite that BitMEX issued a statement to reassure its users, immediately after the United States Commodity Futures Trading Commission (CFTC) and the Department of Justice (DOJ) Accused of violating US laws and enabling illegal trading, investors and clients of the platform began massively withdrawing their funds in Bitcoin (BTC). As shown Coin Metrics Through a post on Twitter, more than 48 thousand BTC were withdrawn from the platform by October 2 since the charges against the exchange.
Data from Coin Metrics, a renowned data provider cryptocurrencies, and digital assets, note that the amount of bitcoins withdrawn from the exchange to date represents about 25% of BitMEX's total reserves in the cryptocurrency, which amount to about 193.000 BTC.
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Binance, Gemini and Kraken the biggest beneficiaries
Given the hard blow that BitMEX suffered with the accusations of the CFTC and the DOJ and with the arrest of Samuel Reed, one of its top executives and co-founder of the exchange, Binance, Gemini y Kraken, three globally recognized cryptocurrency exchanges, have benefited the most. CoinMetrics reports that a large portion of the 48,8 thousand BTC withdrawn from BitMEX has ended up on these exchanges.
Likewise, cryptoquant, a data platform for cryptocurrency and Bitcoin futures trading, muestra Also that about 10 thousand of the BTC withdrawn from BitMEX went to Binance, Kraken and Gemini.
Source: CryptoQuant
According to data shown by the platform, a total of 4.786 BTC, equivalent to about $50,6 million, moved to Binance; 3.899 BTC, equivalent to about $41,2 million, moved to Gemini and 989 BTC, equivalent to about $10,4 million, moved to Kraken.
The largest withdrawal from BitMEX
Moreover, GlassNode, another cryptocurrency network and markets data provider, calls the massive BitMEX asset withdrawal “the largest hourly $BTC outflow from BitMEX that we have observed so far.” The firm notes that in just one hour, BitMEX investors and users withdrew roughly 13% of the platform’s bitcoin reserves — roughly 23 BTC.
Experts believe that the actions of investors, clients and users to abandon the platform is a precautionary measure in case the exchange is found guilty of the charges against it, which may result in the permanent closure of the exchange's operations, as well as the freezing of user accounts and, possibly, the inclusion of the company on a blacklist that prevents the reopening of its services; all this taking into account the harshness of the US laws regarding financial crimes and money laundering.
Cryptocurrency adoption
Likewise, several experts, such as the market analyst Willy Woo, say the CFTC and DOJ's actions will force cryptocurrency exchanges and brokerages to review their practices and ensure they comply with applicable laws and regulations. Woo ensures that these actions are a positive aspect that will help the cryptocurrency and digital asset market to improve considerably, which may lead to greater adoption of crypto assets by society.
“Basically, the market is scared for all the wrong reasons. MEX was NOT hacked. No traders will lose coins. Futures exchanges will clean up their act. We will see less volatility, less cheating, more spot volumes, more organic movement, more institutional money.”
In this regard, the analyst points out that the health of the crypto market will improve thanks to legal actions by government agencies. Cryptocurrency users will be able to feel more secure knowing that crypto trading and exchange platforms comply with all current regulations.
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