[HN Gopher] Federal Court Orders BitMEX to Pay $100M over Illega...
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Federal Court Orders BitMEX to Pay $100M over Illegal Crypto
Trading
Author : wmf
Score : 62 points
Date : 2021-08-10 21:18 UTC (1 hours ago)
(HTM) web link (www.cftc.gov)
(TXT) w3m dump (www.cftc.gov)
| ABeeSea wrote:
| Most of these entities probably don't have that much liquid cash.
| Are they going to need to sell a bunch of crypto to pay the fine?
| $100M is a huge amount in these shallow markets.
| ur-whale wrote:
| > $100M is a huge amount in these shallow markets.
|
| Is it? What are your sources?
| arcticbull wrote:
| Coinlib says USD trading volume today was $193M vs $5.2B in
| 3%-backed ersatz dollars (USDT). So that's 60% of a day's
| entire trading volume globally.
|
| [1] https://coinlib.io/coin/BTC/Bitcoin
| felixbraun wrote:
| They have $1.7b in the insurance fund and take in $300-500m /
| yr (easy calculation if you know their fees and volume, which
| is known to be "real"; Bitmex is absolutely legit and it is
| disturbing that charges against their founders continue)
| Permit wrote:
| > Bitmex is absolutely legit and it is disturbing that
| charges against their founders continue
|
| When you say "absolutely legit" what exactly do you mean?
| That they clearly have anti-money laundering programs in
| place?
|
| Or do you mean they are "absolutely legit" in the sense that
| they created a foreign entity that shouldn't be held to U.S.
| anti-money laundering laws?
| [deleted]
| huac wrote:
| A single block order taking out $100M of liquidity could move
| markets but it's not a priori that big. Bitmex has $1-2B of
| daily trade volume (per nomics) even after all of the
| controversy, Binance has $50B and FTX has $11.5B.
| vngzs wrote:
| Yeah, but trading volume is not liquid cash. It's not the
| exchange's money. They make money on fees / commissions, but
| they can't just dip into the customer funds and use them to
| pay the government.
| gruez wrote:
| >but they can't just dip into the customer funds and use
| them to pay the government.
|
| But if they have $1B-2B worth of trade volume daily and
| they charge a 0.1% fee per trade, wouldn't that mean
| they're generating $1M daily in revenue? From that,
| wouldn't it be reasonable to assume they have profits
| accumulated to pay the fine?
| rootsudo wrote:
| You'd think but look at Mt. Gox.
| ur-whale wrote:
| > You'd think but look at Mt. Gox.
|
| Gox was a ridiculously amateurish affair run by a french
| pimply php hacker and manga lover teenager.
|
| Bitmex is in a slightly different league.
| schmichael wrote:
| How is trading volume related to cash liquidity? An exchange
| with 0 fiat on/offramps and no cash in the bank could still
| trade billions of USD worth of cryptocurrencies a day.
| gruez wrote:
| >How is trading volume related to cash liquidity
|
| It's not. The parent commentis talking about the liqudity
| of the market as a whole (ie. what would happen if 100M
| worth of bitcoin was sold at once)
|
| >An exchange with 0 fiat on/offramps and no cash in the
| bank could still trade billions of USD worth of
| cryptocurrencies a day.
|
| It would presumably have millions of USD worth of _crypto_
| in their wallet (since they charge trading fees). They can
| take the crypto and dump it into the very liquid bitcoin
| market to turn it into cash.
| latchkey wrote:
| $100m is peanuts in crypto now.
|
| A Chinese defi site just got hacked for $600m today.
| whynotkeithberg wrote:
| Exactly. Someone else commented that 100m in USD is way
| different than 100 worth of crypto... But that's just not
| true anymore. 100 million in a highly liquid market where you
| can see 100 million dropped on a single exchange in a single
| minute candlestick on bitcoin alone, then it really isn't
| that much of a difference.
| arcticbull wrote:
| 100M USDT yeah, USD who knows? It's 85% of trading volume.
| Check out the plot on Coinlib. [1]
|
| Today's USD trading volume was $193M while USDT was $5.2B.
| USD trading volume is a rounding error against USDT volume.
|
| 100M USD is more than 1/2 of the entire day's trading
| volume of BTC against real dollars.
|
| [1] https://coinlib.io/coin/BTC/Bitcoin
| latchkey wrote:
| Doing any of these comparisons is futile now that there
| is multiple versions of tokenized BTC (tbtc, ren, sbtc,
| hbtc... i could go on), BTC analogies (digg/queen are
| examples), as well as a ton of various stablecoins. Never
| mind OTC and DEX trades that never even hit the order
| books.
|
| There is a lot more volume than you probably know about
| it.
| qeternity wrote:
| You can see $100m volume in a single timeframe. That's
| different than dropping $100m. There isn't $100m of net
| selling in those candles (at least the ones that don't rip
| through thousands of dollars in testing liquidity)
| inasio wrote:
| $100m and an order to stop selling crypto derivatives...
| schmichael wrote:
| $100m of USD is different from $600m _worth_ of
| cryptocurrencies.
| whynotkeithberg wrote:
| It is in a market without liquidity... However, in a market
| with enough trading volume from enough unique people there
| isn't that much of a difference. especially not in a market
| where hundreds of million get dropped in literal minutes.
| graeme wrote:
| 900 Bitcoin are mined each day. If we make two assumptions we
| can get an estimate of how much fiat enters the markets each
| day:
|
| * Bitcoin mining is an efficient market and there are no
| profits
|
| * Bitcoin miners sell all of the bitcoin they mine
|
| These assumptions aren't exactly realistic but over the long
| run they should actually be close enough to the truth. Given
| those assumptions, at current market rates then an extra
| $41,121,180 has to enter the markets each day to keep prices
| stable, assuming buy/sell demand is otherwise equal.
|
| More than that wanting to enter, prices go up, less, prices go
| down. Leaving aside price manipulation by Tether, Binance etc
| (THIS is a big assumption, but the exercise is still valuable I
| think).
|
| So, the fine is only 2.5x the daily excess needed to keep
| prices stable. Shouldn't have a giant effect.
|
| (You may wonder, if no profits, what are the miners doing?
| Essential the bitcoin network is an organized effort to take
| capital, acquire coal, and burn it. Contrary to "store of
| value" claims, literally all money invested into bitcoin either
| gets burned up, or goes to pay someone who entered bitcoin
| previously. It's an entirely negative sum game, with guaranteed
| capital losses in aggregate. However, this added $100 million
| is not a meaningful amount in view of the actual scale of
| energy burnt each year to run the network. It _might_ be a
| meaningful amount of Bitmex 's capital, but likely this won't
| wreck them on its own.)
| mdoms wrote:
| Your post assumes that there's no manipulation of the market
| occurring, an assumption we know to be false.
| csomar wrote:
| I don't think the miners can manipulate their energy bill,
| salaries, rent, hardware costs, etc...
| Clewza313 wrote:
| The OP's assumption was that $42M in fiat has to enter
| every day to keep prices stable. Manipulation can
| definitely keep prices stable without a net fiat
| inflow... until one day it can't, because as you note the
| bills have to be paid in fiat, not Tether etc.
| slyrus wrote:
| Wasn't there some news about a $100M BTC transaction yesterday?
| Coincidence?
| johnnyApplePRNG wrote:
| So I'm working on a crypto derivatives trading bot... have been
| for a few years now... it's going alright.
|
| I am personally situated in Ontario, Canada, and getting more and
| more anxious by the day as seemingly every major legitimate
| derivatives trading platform with any volume is banning Ontarians
| from trading.
|
| Kraken, Bitmex, Okex, and Huobi all won't even look at me simply
| because I have a personal address inside Ontario.
|
| I can trade on their spot markets with them, sure... but the fees
| are MUCH higher than that of derivatives markets and my bot isn't
| THAT good to swallow a 0.3% trade cost when it's essentially
| performing high frequency trading. A fee of 0.075% however is
| manageable.
|
| Binance still allows me to trade derivatives, and I can't figure
| out how or why. They don't have any legal authority to allow
| Ontarians to trade afaik, and they're the absolute largest
| derivatives trading platform on the planet right now.
|
| I tried setting up a corporation in the UK back when Bitmex
| originally banned Ontarians, but when I went to register that
| corporation as a trader with Bitmex, they demanded to know the
| identity of all of the owners of the corporation, and if any of
| them resided inside Ontario then they wouldn't work with that
| corporation as well.
|
| (the bot was originally setup to trade on Bitmex as they had the
| most liquidity at the time, but that has dwindled significantly
| ever since they banned Ontarians and all of the USA from trading
| in October 2020)
|
| I don't have millions of dollars in my pocket, so I don't have
| the money to jump through legal loopholes by registering shell
| corporations and paying representatives to act as proxy owners in
| non-banned jurisdictions.
|
| I'm not doing anything wrong imho. I'm not risking my life
| savings or going to crash the cryptocurrency market with my
| derivatives trading ways or whatever the Ontario government is
| trying to protect me from?
|
| I am just another guy trying to make a buck like everyone else on
| this planet. Why is my government trying to prevent me from doing
| so at every turn? I just don't get it?
|
| What are my options if/when Binance decides to ban Ontarians as
| well?
| ur-whale wrote:
| > What are my options
|
| Vote with your feet.
| tiborsaas wrote:
| > The Seychelles-based company wrote it agrees to pay as much as
| $100 million to resolve the charges with the US organizations,
| but did not clarify how much was going to each agency.
|
| https://blockworks.co/bitmex-agrees-to-settlement-up-to-100m...
| qeternity wrote:
| > The CFTC's litigation against BitMEX's founders continues.
|
| I'm surprised that it's "only" $100m given that they are
| continuing to pursue criminal charges against the founders.
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(page generated 2021-08-10 23:00 UTC)