{"id":25705,"date":"2018-11-12T21:14:59","date_gmt":"2018-11-12T20:14:59","guid":{"rendered":"https:\/\/ethereumworldnews.com\/?p=25705"},"modified":"2018-11-12T21:14:59","modified_gmt":"2018-11-12T20:14:59","slug":"bitmex-ceo-we-dont-trade-against-our-customers","status":"publish","type":"post","link":"https:\/\/ethereumworldnews.com\/bitmex-ceo-we-dont-trade-against-our-customers\/","title":{"rendered":"BitMEX CEO: “We Don’t Trade Against Our Customers”"},"content":{"rendered":"
Although BitMEX is one of the crypto market’s most prominent platforms, there is a multitude of industry players that have yet to trust the exchange in full.<\/p>\n
For those who are unaware, the Seychelles-based, Hong Kong<\/a>-headquartered platform has become well-known for its margin trading feature, which utilizes a somewhat complicated sequence of insurance funds, peer-to-peer contracts, and other systems to allow traders to leverage their Bitcoin (BTC) 100x.<\/p>\n However, over recent months, as the value of crypto assets fell, rumors arose that BitMEX had nefarious intentions. Some conspiracists had connected the dots to claim that the startup, founded in 2014, was willing to undermine its clients to turn a quick buck.<\/p>\n One such critic\/cynic was Hasu, a pseudonymous self-proclaimed “independent\u00a0cryptocurrency researcher,” who released a jaw-dropping 13 minute-long Medium post<\/a> on BitMEX’s potentially shady dealings in late-October that rattled the crypto community.<\/p>\n https:\/\/twitter.com\/hasufl\/status\/1054425493066407937<\/p>\n Hasu first noted that while the company expresses its love for this industry and technology incessantly, this may be nothing more than a guise or facade, subsequently dubbing BitMEX an “opaque entity that wields disproportionate influence in the industry.”<\/p>\n Bringing credence to his inflammatory words, Hasu embarked on a research journey, finding data, people, and documents that supported his theory that the Seychelles-based startup doesn’t have its users at the top of its priority list.<\/p>\n Although the article stretched out to over 3,000 words, the following are Hasu’s three primary qualms (which are just speculative guesses) with the platform:<\/p>\n They trade\u00a0against their customers<\/strong>: The platform may be secretly trading against its customers through a market maker, which was just disclosed in April of 2018. Interestingly, after the firm disclosed that it had a market-making desk, which is a “for-profit operation,” it lost its legal counsel. Hasu has claimed that this speculation could implicate that BitMEX is using its entitlement\u00a0immorally to profit off its user base.<\/p>\n<\/li>\n The platform “weaponizes their server problems\u201d<\/strong>:\u00a0A reoccurring theme seen in the BitMEX community is the jokes around the platform’s endless stream of “server overload” prompts. Although they may seem innocent enough, Hasu has claimed that the startup may be giving preferential access to certain traders during periods of overload. The critic also claimed that users can arbitrage and “trigger a chain of liquidations” during an overload, which evidently isn’t right.<\/p>\n<\/li>\n It “monetizes customer liquidations through their insurance fund\u201d:\u00a0<\/strong>Due to the leverage system that BitMEX enlists, it requires traders to place marginal holdings into an insurance fund. Although this fund allows for high-leverage trades, Hasu has claimed that the company makes “significant money from liquidations.”<\/p>\n<\/li>\n<\/ul>\n Regardless of the specifics of each issue, the cynic came to the following conclusion, which was quick to the punch:<\/p>\n But a series of recent issues with the exchange leads me to believe that they have a hard time acting ethically once it gets in their way of making more money.<\/p><\/blockquote>\n However, CEO Arthur Hayes, who recently called for Bitcoin (BTC) to fall below $2,000<\/a> in due time, has claimed that these rumors are baseless and that his firm’s dealings have been misinterpreted. Hayes’ remarks on the matter were conveyed through Yahoo Finance U.K.<\/a> at an unnamed event in London.<\/p>\n https:\/\/t.co\/prhtgOHpZo<\/a><\/p>\n — Yahoo Finance UK (@YahooFinanceUK) November 12, 2018<\/a><\/p><\/blockquote>\n\n
Arthur Hayes: BitMEX Doesn’t Trade Against Its Customers<\/strong><\/h2>\n
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