BitMEX CEO Denies Allegations of Trading Against Customers

Exploring some of the most prevalent concerns users have with crypto exchange behemoth BitMEX, one of which is that the exchange trades against its customers to make a profit.

BitMEX CEO Arthur Hayes publicly came out against the allegations on Monday in an interview.

While there is no hard evidence to support them, he still views them as valid in consideration of the incentive BitMEX has through them to make money.

BitMEX monetizes customer liquidations via its insurance fund.

The DeskBitMEX has its own trading desk that acts, according to BitMEX's website.

"They have the same trading rights as any other regular trader, they can't see the liquidation prices of any of our customers. We don't trade against our customers. It's actually pretty bad business model and introduces a lot of risk into what is right now a riskless business model, BitMEX. We match trades, that's it, we have no risk. Trading against our clients is nonsensical."

He asserts most of BitMEX's customers "Don't believe" that their trading desk breaks even, and cites a lack of an external audit of their business practices as the source of customer concern.

"Weaponized" Tech IssuesTo Hasu's second point, when the exchange receives more orders than it can process at once, which is frequently, BitMEX will temporarily shut users out and close down to trading.

The fund gains money when a leveraged trade is closed out and BitMEX liquidates.

Hasu contends the fund is actually making BitMEX money, saying that BitMEX views it as an asset since they don't store the BTC in a separate account or cap its growth.