BitMEX Delivers Response Policy For Lack of XRP Futures Compensation

The Philippines Gets Crypto Exchange From BitMex

BitMEX stands as one of the world’s largest cryptocurrency derivatives exchanges. Today, the exchange announced its response policy towards the recent “Flash Crash” that happened to XRP/USD trading on the 14th of February 2020. Some users on the exchange forcibly closed their positions, which flooded the claims. This caused a massive crash in the market due to the sudden destabilization gaining its own momentum.

Refusal For Compensation

As voices of anger grew, demanding that those responsible gain some sort of punishment, BitMEX was forced to respond. According to the exchange, the stop losses performed by “some traders” wasn’t made with the index price, but the actual last trading price. The entire point of the investigation, it seems, was to clear their own name. The exchange quickly explained that there was no problem with the system itself or the stop-loss mechanism in particular.

BitMEX further stated that it wasn’t going to roll back any transaction, or even refund anyone in this case. This comes despite the massive influx of solution suggestions, including monetary compensation.

Investigations Abound

A lawyer, familiar with the industry of crypto, gave a small explanation of the matter. BitMEX doesn’t stand as a registered company in the US, Asia, and Japan. The problem with that is that a majority of its users come from those three regions. Thus, there is no legal obligation or state protection that will be given to the users of that region. A brutal observation, but a true one regardless.

The CFTC had even investigated BitMEX back in July of 2019. However, the regulator has yet to reveal its findings on the matter.

Kraken, a US exchange that sees the occasional flash crash thanks to circuit breaks, reports that a large number of search requests and subpoenas have been leveled at them throughout 2019. All these requests and subpoenas have come from the FBI. It’s probable that BitMEX will see traders ask the CFTC to investigate them, trying to find damage from a massive flash crash.

The Wheels of Progress

What will happen now is a bit up in the air, but it’s been speculated by another lawyer that BitMEX will comply with CFTC investigation requests, regardless of obligation thereof.

Flash crashes are a more modern issue within the world today, as automated systems in exchanges allow for certain assets to plummet in value incredibly quickly. These kinds of events stretch across all formats, and one must be careful that you don’t lose money with it.

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      A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications.