[HN Gopher] Federal Court Orders BitMEX to Pay $100M over Illega... ___________________________________________________________________ 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. ___________________________________________________________________ (page generated 2021-08-10 23:00 UTC)