BitMEX, a cryptocurrency exchange is under investigation by the US Commodity Futures Trading Commission. The investigation is a preliminary check on possible rule-breaking by the Exchange in the US.
BitMEX is the target of investigation by the CFTC due to the possibility that US citizens have traded on their platform. The US does not allow its citizens to trade on platforms not registered to the CFTC. BitMEX is not registered with the CFTC. It is registered in the Seychelles but is headquartered in Hong Kong. They also have an office in San Francisco, USA.
The exchange has gone on record stating that it has removed any US citizen that has traded on the platform as per the CFTC guidelines. The probe is still on-going and may not lead to any formal accusation or allegation by the US department.
The main contention of the US agency was the possibility that users from the US could have continued using its services by masking their location using a VPN. However, the responsibility of excluding these users may not be placed on the exchange.
BitMEX is an exchange that made headlines for upping Bitcoin investment returns. This has been a cause for controversy that may fuel the on-going investigation of misconduct.
The probe is in the backdrop of multiple hearings on Facebook’s currency Libra being a danger to the economy. BitMEX is under investigation for possible misconduct which may affect the public perception of cryptocurrencies.
Breather for Indian Crypto Users
Meanwhile, Indian crypto users may get a respite from the recent slew of bans from various government bodies. In a question posed in the upper house of the parliament, the Finance ministry made a very specific statement that India has not banned cryptocurrencies yet.
Dharmapuri Srinivas posed the starred question to the Finance ministry as follows –
Will the Minister of FINANCE be pleased to state:
a) whether Government has prohibited crypto currency in the country;
b) if so, the details thereof;
c)whether Government has taken note about prevalence of cryptocurrency in the country;
d) if so, the details thereof; and
e) the action taken against the persons who are responsible for running the cryptocurrency in the market?
In response, the Minister Of State In the Ministry Of Finance(Shri Anurag Singh Thakur) said –
a) & b) No, Sir.
c) & d)Taking note of the issue, the Government has constituted an Inter-Ministerial Committee(IMC) under the chairmanship of Secretary (EA). The IMC has submitted the Report to the Government.
e) Presently, there is no separate law for dealing with issues relating to cryptocurrencies. Hence, all concerned Departments and law enforcements, such as RBI, Enforcement Directorate and Income Tax authorities etc., take action as per the relevant existing laws. Similarly, police/courts take action on lPC offences. Further, in view of the risks and dangers associated with cryptocurrencies, Government and RBI have been issuing advisories’ press releases and circulates to the public.
The ban has not yet been placed on cryptocurrencies. However, the uncertainty around crypto in India remains.
Chinese Court says Bitcoin is Valuable
In a recent ruling, a chines court has called Bitcoin a valuable property. The Hangzhou Internet Court said that Bitcoin “holds the attributes as property – valuable, scarce and disposable.”
This is in direct opposition to the ban on all cryptocurrencies by the chinese government since 2017.
“This case is a major milestone,” she commented, summarizing that the court had de facto confirmed Bitcoin is legal in China.
The Hangzhou case follows on from a previous legal ruling in October 2018, when the Shenzhen Arbitration Commission similarly deemed Bitcoin should receive legal protection as property.