The founders of BitMEX, formerly the second-largest crypto exchange, have stepped down. They stepped down after a series of allegations were made against them by the CFTC (Commodity Futures Trading Commission).
The CFTC filed a case against BitMEX's founders after observing the exchange's illegal operations. The charges include operating an illegal exchange and failure to comply with the regulator's KYC policy. Violating the policy could lead to financial crimes like money laundering and layering. The BitMEX founders could face five years in prison.
The executives vehemently deny the allegations. They plan to take the necessary legal actions to defend themselves. Stepping down could be part of their preparation for legal battles.
Latest BitMEX news
Amid the allegations, BitMEX lost its position in the market as well as public confidence. The exchange witnessed huge withdrawals by investors. According to reports, over 45,000 BTC or $500 million has been withdrawn from the exchange since the CFTC's announcement.
A research statement by Acne Research showed that BitMEX bitcoin derivative markets dropped as low as 45,122 BTC, which represents a 16 percent drop in the price. Even at this low price, investors are reluctant to participate. They are concerned that BitMEX could face solvency risk.
The report stated that the executives needed to step down for the exchange to regain public confidence and investors' loyalty. BitMEX also needs to comply with the necessary regulations. In the interim, Vivien Khoo, the chief operating officer of 100x Group, will be the new CEO. Ben Radclyffe will be the commercial director.
Who are BitMEX founders Arthur Hayes and Samuel Reed?
Arthur Hayes is a U.S. entrepreneur and one of BitMEX's founders. He graduated from the Wharton School of Business at the University of Pennsylvania before he joined the exchange. He lives in Hong Kong and has worked with Deutsche Bank's and Citibank's ETF businesses. Hayes has experience in trading equity index futures, forwards, and swaps. His experience extends to trading non-derivable foreign exchange forwards.
Samuel Reed is a professional programmer who graduated from Washington and Lee University with a degree in computer science. He has worked with two technology companies Tixelated and Global Brand Solutions of Hong Kong as a CTO. In 2014, he joined BitMEX as a co-founder and a chief technology officer.
What is Arthur Hayes' net worth?
According to reports, Hayes is on the list of the 100 richest people in the crypto space. There isn't an exact figure of his net worth, but the exchange that he co-founded is worth $3.6 billion. BitMEX makes a huge profit from the high amount of trades. The exchange handles more than $2 billion in trade on a daily basis.
What is bitcoin's price today?
Bitcoin returned back to an upward trend after a sudden crash over options expiration and transfers. At the new high, bitcoin has broken over the $10,500 threshold. At the time of this article's writing, the price is at $10,914, which represents over a 2 percent increase on Oct. 8, according to CoinMarketCap.