The British financial observer has warned users in the way invest than any involvement with BitMEX. He did not accuse BitMEX of defrauding customers directly. However, he says that operating without a proper license is both illegal and suspicious, as it makes affiliation with expert scam artists much more likely.
This is not the first time that Britain has acted against BitMEX and similar exchanges. Last June the Financial Conduct Authority (FCA) began investigating the ban on crypto derivatives, which he later recommended.
BitMEX and scammers
In addition, last October, the country's Advertising Standards Authority (ASA) filed a complaint against an announcement that BitMEX published in British newspapers. The UK is one of many nations that are taking steps to take over the crypto derivatives markets.
These financial products are currently unregulated and extremely risky. BitMEX is the most popular exchange in the sector of this type of trading, and obviously it is in the crosshairs. To relieve the pressure, BitMEX has independently chosen to block several countries, especially the United States.
Regulation will be extremely difficult
BitMEX is part of the group of those broad-spectrum cryptocurrency exchanges, which is becoming increasingly complex due to the introduction of new financial products. While regulators are well aware of this activity, the anonymous and borderless nature of blockchain technology makes regulatory compliance extremely problematic.
For its part, BitMEX has always insisted that it is an honest institution that urges customers to follow all relevant laws. However, its leverage options involve huge amounts of cryptocurrency trading that circulate through its platforms every 24 hours.
The exchange is accused of facilitating, directly or indirectly, much of the market manipulation that has become a hallmark of the crypto space. It is therefore not surprising that governments try to act against it.
This situation will only become clearer when legislative financial institutions are involved in cryptocurrency trading. While the actors currently operating in this sector are almost certain to cooperate fully with regulators, their presence will force governments to take more measures to tackle the world of cryptocurrencies as a new class of activity.
Proponents of the cryptocurrency economy have long been calling for greater legal recognition of blockchain resources as a means of bringing both mass adoption of digital currencies and helping to prevent scams. The FCA's statement should therefore be followed by an increased effort by this institution to develop standards under which the cryptocurrency can be bought and traded. It remains to be seen if and when these measures become operational.