A storm is brewing over the largest Bitcoin exchange
Foul play at BitMEX? Exploring the biggest concerns
Representatives of BitMEX, the largest Bitcoin exchange, love to show how much they care about the crypto community. When their charismatic CEO Arthur Hayes goes on CNBC to say nice things about Bitcoin, the recordings go viral on Twitter, and when the amazing BitMEX Research puts out a new blog post, everyone stops their day to read it.
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. That is a problem because BitMEX is based in the Seychelles and doesn’t submit to any regulator.
BitMEX is an opaque entity that wields disproportionate influence in the industry. In an attempt to understand the machinations of the exchange, I did two things:
- Interviewed everyone who was willing to talk to me about BitMEX, listening to their most frequent and reasonable concerns.
- Built a mental model of how I believe BitMEX operates and what their incentives are.
That led me to identify three main concerns.
- “BitMEX trades against their customers”
- “BitMEX weaponizes their server problems”
