BitMEX crisis worsens: Arthur Hayes steps down, 30% of all Bitcoin withdrawn

  • Arthur Hayes and other BitMEX executives involved in the current charges have resigned.
  • Chainalysis has announced that they will declare BitMEX transactions “high risk”.

BitMEX has seen better days. After the charges filed by the U.S. Commodities Futures Trading Commission (CFTC), the outlook for BitMEX now appears to be deteriorating. In an apparent attempt to mitigate the situation, BitMEX has announced changes in the board of directors of its parent company 100x Group.

According to a press release, Arthur Hayes and Samuel Reed have left management positions at 100x Group. In the press release, it is stated that the decision has been supported by Hayes, Reed and Ben Delo, founders of BitMEX. With immediate effect, Hayes will step down as CEO and Reed will step down as CTO; the other defendants will step down as executive managers.

Hayes has been replaced as CEO by Vivien Khoo, who is part of the exchange since March 2019 when she left her position at Goldman Sachs as Managing Director for Asia Pacific Compliance. Previously, Khoo was also part of the Hong Kong Securities and Futures Commission. Khoo will serve as an interim CEO.

In addition, Ben Radclyffe will be the Commercial Director to assume responsibilities related to the relationship of the exchange with its clients and the supervision of financial products, according to the press release. Radclyffe has worked for Tower Research Capital and the Deutsche Bank. 100x Group Chairman David Wong said:

These changes to our executive leadership mean we can focus on our core business of offering superior trading opportunities for all our clients through the BitMEX platform, whilst maintaining the highest standards of corporate governance. We have an exceptional senior leadership team who are well-placed to continue the growth and development of the 100x Group, including completion of the BitMEX User Verification Programme. It is business as usual for us and we thank all clients for their continued support.

Business as usual? Increased Bitcoin withdrawals on BitMEX

Data analysis firm Glassnode has been monitoring the status of BitMEX’s Bitcoin funds since the charges were filed. As CNF reported, less than a week ago, BitMEX had lost 23,200 Bitcoin of its funds within 24 hours of the news. 48 hours later, BitMEX already registered 40,000 BTC withdrawn and since then, Glassnode estimates that 50,000 BTC or approximately 30% of BitMEX funds have been withdrawn by users.

At the same time, exchanges Binance, Kraken and Gemini have seen an increase in their BTC funds as users migrate to them as less risky entities. To worsen BitMEX’s outlook, research firm Chainalysis has also announced that they will declare BitMEX transactions “high risk”. A Chainalysis representative stated that the category has been granted to BitMEX due to recent events. Chainalysis emailed its clients the following statement:

Any transfers from October 1st and later should be considered high risk. Compliance teams should also look back at older transfers, but given this change may trigger alerts on thousands of older transfers, it is reasonable to do that incrementally.

About Author

Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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