What’s hot in crypto this week? 

BitMEX — it’s a peer-to-peer cryptocurrency exchange and derivatives trading website dealing in bitcoin. It was founded in 2014 in Hong Kong, but is currently based in the Seychelles. BitMEX offers a variety of trading services, including margin trading with up to 100-times leverage. That means a deposit of $1,000 will result in a trader having the ability to trade $100,000 worth of BTC and futures trading, allowing investors to bet on the future prices of BTC. 

The platform only handles prices in bitcoin, rather than fiat currencies, meaning that all gains and losses are in BTC. In 2016, BitMEX became the first Bitcoin denominated futures contract on a Chinese A Share index.

Why? 

On Oct. 1, the U.S. Attorney’s Office for the Southern District of New York unsealed a criminal indictment against several BitMEX executives, including the chief technology officers, alleging they failed to comply with the Bank Secrecy Act before allowing U.S. residents to trade funds on the platform. Specifically, the authorities said the exchange did not conduct know-your-customer checks, which opened the door for potential criminal activity. The U.S. Attorney even alleges that BitMEX failed to register with the Commodity Futures Trading Commission, or CFTC.

This is a big deal. BitMEX, which has objected to the charges, is one of the industry’s largest trading platforms. In 2016, it introduced a derivative known as perpetual swaps (futures that don’t expire) to the market, with up to 100-times leverage, and for many years it was the market leader by derivative volume and open interest. 

“BitMEX touts itself as the world’s largest cryptocurrency derivatives platform in the world with billions of dollars’ worth of trading each day. Much of this trading volume and its profitability derives from its extensive access to United States markets