Users of Bitcoin derivatives platform BitMEX have withdrawn over 32,200 bitcoin (approximately $337 million at press time) following CFTC charges of anti-money laundering violations and the arrest of the firm's CTO.
As a result of the allegations, anxieties boiled up over potential BitMEX asset seizures, with many nervous about whether withdrawals would be processed at all. Nevertheless, BitMEX allayed fears by processing withdrawals as traders pulled their funds en masse.
Per data from on-chain analytics frim Glassnode, 23,200 bitcoin (approximately $242 million) of the total removed so far was withdrawn in a single hour - a figure amounting to around 13% of all bitcoin held by BitMEX.
Subsequent withdrawals witnessed further withdrawals; at the time of writing, nearly 40,000 bitcoin have been siphoned from the exchange since the allegations struck.
As reported, the Commodity Futures Trading Commission (CFTC) levied accusations against BitMEX for allegedly operating an unregistered trading platform and violating anti-money laundering rules. The firm's founders Arthur Hayes, Benjamin Delo, and Samuel Reed have also been charged with violating the Bank Secrecy Act. Of the three, only Reed has been arrested. According to prosecutors, Hayes and Delo remain "at large."
The divisive derivatives site which popularized 100x leverage - a trading method allowing traders to gain greater exposure to Bitcoin by borrowing capital - is registered in the Seychelles with offices in Hong Kong and San Francisco.
The CFTC alleges that as the majority of the platform's trading volume and profitability is derived from the U.S., BitMEX should be registered with the agency and comply with its rules and regulation.
In a statement, BitMEX denied all charges, vowing to have its day in court.
UPDATE (Oct 2nd, 16:42 UTC): Updated the total amount of bitcoin reportedly withdrawn from BitMEX from over 32,200 to nearly 40,000.