It appears the ‘Tangle in Taipei’ between Professor Nouriel Roubini and BitMEX CEO Arthur Hayes is still ongoing with the latter alleging illegal operations on the part of the bitcoin exchange.
In response, Hayes, says BitMEX adheres to the highest legal and regulatory standards. Roubini continues to a firm cryptocurrency critic, not wasting any opportunity to cast the market and the industry in a bad light.
BitMEX is Running an Illegal Operation, Says Roubini
According to economics professor popularly known as Dr. Doom, BitMEX engages in practices that have questionable legality. The cryptocurrency critic alleges that the platform might be trading against its customers, earning revenue from liquidations.
Roubini also accused BitMEX of not putting measures to prevent money laundering. In a post quoted by Bloomberg, the professor declared:
“At a minimum, Hayes and all of the others overseeing similar rackets from offshore safe havens should be investigated, before millions more retail investors get scammed into financial ruin.”
One of the key points of criticisms against BitMEX is the platform’s provision of 100x leverage crypto bets which could expose traders to huge losses. However, users aren’t forced to choose such a leverage option.
As for accusations of trading against its customers, BitMEX has consistently denied such a practice. Responding to these new allegations in an email to Bloomberg, a representative of the exchange noted:
“BitMEX provides safe, fast, professional and liquid ways for those who see the potential of crypto and to trade and hedge cryptocurrency risk. We continue to monitor all legal and regulatory developments around the world and will comply with all applicable laws and regulations; we reject any allegations of criminality, manipulation or unfair treatment of our customers, who are at the center of everything we do.”
BitMEX and its CEO, Arthur Hayes have become the latest to be involved in a public spat with Roubini. The economics professor has continually espoused negative sentiments about cryptocurrencies.
Fake Trading Volume and Leveraged Bets on Bitcoin Exchanges
Margin trading and fake volumes are some of the main points of criticisms against major bitcoin exchanges in the market. As previously reported by Blockonomi, Poloniex users had to endure a $14 million hair cut to cover losses from a leverage crypto trade gone wrong.
This risk hasn’t prevented other platforms from enabling leveraged crypto bets. Bitfinex recently activated its own 100x margin trading feature in the hopes of competing with BitMEX which has been enjoying record trading volume.
Other major players like Binance also offer leverage bets with reports of American exchange behemoth Coinbase joining the group. Regulators in countries like Japan have enacted limits to the amount of leverage that bitcoin exchanges can offer their customers as a way of mitigating the risks involved in crypto margin trading.
While Hayes and BitMEX say their volume figures are accurate, there has bee numerous reports of wash trading being rampant in the crypto exchange scene. Majority of the cryptocurrency exchanges in the market allegedly inflate their trading figures to obtain higher rankings on platforms like CoinMarketCap. By so doing, these exchanges can demand high listing fees from altcoin projects.
Cryptos in the Spotlight of Government Attention
This fresh round of accusations by Roubini comes as cryptos are becoming a greater focus of government attention across the globe. Presently, the U.S. Congress is holding hearings centered around Facebook’s Libra cryptocurrency project.
As reported by Blockonomi, France is set to introduce cryptocurrency regulations for initial coin offerings (ICOs), exchange platforms, and wallet providers to mention a few. The country’s new regulatory paradigm also includes laws concerning crypto-specific tax rules.
