BitMEX, the second largest cryptocurrency exchange by trading Volume is reportedly facing some regulatory challenges which have led to the exchange closing accounts of the user from Canada and the United States.

BitMEX Moved to Hong Kong to Avoid Sanction

BitMEX which moved its operations to Hong Kong to avoid complying with some regulatory rules designed to governed North American based entities is still facing some major backlash as the exchange still attracts customers from this region.
This is happening despite the fact that the exchange has formally issued warnings making it clear North American and Canadian users are not welcomed on its platform.
BitMEX has also made it known that it lacks a comprehensive measure designed to help it detect users from these regions. Even if it does, the use of circumvention mechanisms such as VPN connections and IP change should be taken into consideration.

In order to comply with the regulatory policy governing crypto exchanges in these regions, BitMEX would have to totally block users from North America and Canada from accessing its platform.
Also, BitMEX is now required to be notifying users from “North Korea, Iran, Syria, Cuba, Sudan and Sevastopol in the Crimea” of service termination. This is because these regions are also restricted from getting serviced by the exchange. The rule to block users from this region has been in effect since the fourth quarter of 2018.

AMF and SEC Issued Warnings

The decision to permanently block its Canadian clients, was made after a letter from Autorité des Marchés Financiers (AMF) made it clear that the exchange is committing a criminal offence by offering its services to Canadian users without receiving proper authorization from the country’s top financial authority.

According to the AMF’s director of media relations “BitMEX is not registered with the AMF and is therefore not authorized to have activities in the province of Quebec. We informed this company that its activities were illegal.”

Following the same pattern is the US Securities and Exchange Commission (SEC). The SEC has issued a statement in the past making it clear that BitMEX is in direct violation of its financial laws.

By Joshua Tayo