Back in July, the chief executive of BitMEX, Arthur Hayes, duked it out with New York University economics professor Nouriel Roubini in a scathing debate. While many say Hayes won, he and his platform quickly went silent on social media, turning two once-active Twitter accounts into seeming ghost towns.
You see, in the wake of the debate — the so-called “Tangle in Tapei” — Bloomberg released a very important report on BitMEX, a cryptocurrency futures trading platform that is infamous for “rekting” traders. The outlet, citing sources familiar with the matter, wrote that the U.S. Commodity Futures Trading Commission (CFTC) has begun an investigation into whether or not the Bitcoin exchange has allowed Americans to use its products. The CFTC classifies crypto derivatives, namely futures, as under its jurisdictions.
The CFTC purportedly declined to comment on the case, as did BitMEX. And Hayes asserted that his platform would “continue to monitor all legal and regulatory developments around the world and will comply with all applicable laws and regulations”, adding that he rejects any allegations of criminality or misconduct.
Seemingly to maintain the integrity of the potential case, Hayes and BitMEX dropped off the map in the days following the report.
But BitMEX is back, and it’s back with a vengeance. A vengeance against Binance anyway.
BitMEX Kicks Up Twitter Spat With Binance
BitMEX tweeted from the company account for the first time in some 45 days. In it, they sent a backhanded compliment the way of Binance, writing that it was congratulating its rival for launching its Testnet Futures. BitMEX added, “Glad to see you enjoyed reading our documentation as much as we enjoyed writing it!”
The tweet had screenshots attached of the documentation of both Binance’s and BitMEX’s auto deleveraging and funding rate details. While this could have been seen as an odd way to compare their products, Binance’s copy reads near identical to BitMEX’s, hence the sarcasm in the tweet.
— BitMEX (@BitMEX) September 4, 2019
Hayes followed suit, posting a “meme” about copying homework on his own feed.
Changpeng “CZ” Zhao of Binance was quick to apologize. The CEO wrote that the plagiarized copy was actually not from their writing team, with Binance operating one of its testnets on an acquired website. But, he assured that he would “fix/remove” it “ASAP”.
For those who missed the memo, Binance is in the midst of launching its own futures platform, which many say will become one of BitMEX’s primary competitors. As reported by Blockonomi previously, the startup will be giving away 10,000 Binance Coin (BNB) — over $200,000 — to those that test its two testnet futures trading platforms. If testing goes successfully, the futures platform will be launching in the next few months.
Is BitMEX Still In Trouble?
Considering that BitMEX has been silent for some 45 days, the fact that it came back with a joke should be seen as a good sign.
But, the data shows that the platform may still be experiencing some residual pain from the CFTC report.
The chart below depicts the trading volume on BitMEX’s flagship product — the Bitcoin to U.S. dollar perpetual swap. While there isn’t a very distinct downtrend, you can see that the trading volume in the days after the report seems noticeably lower than in the days prior to the report. Of course, the report did coincide with a loss in bullish momentum, but the drop-off does seem steep.
That’s not all. Twitter analyst Ceteris Paribus, who cited data from blockchain analytics firm Ceterius Paribus, found that BItMEX saw some $524 million in net outflows in July, marking the largest outflow ever. This implied that traders were withdrawing their Bitcoin from the exchange to avoid regulatory risk.
But, in August, the dust seemed to settle a bit more, with BitMEX’s monthly Bitcoin flows being much closer to zero. So, with ample time, traders might just forget that Bloomberg ever released that report, and start to use BitMEX once again.