19% Of All BTC Stored On BitMEX Were Withdrawn After Filed Charges

19% of all BTC stored on the crypto exchange BitMEX got withdrawn by the users after the CFTC filed charges yesterday. More than $336 million worth of BTC were withdrawn from BitMEX as we are reading more in our latest Bitcoin news.

The recent data shows that crypto traders had taken out their coins in a few batches, the first one of which was 23,200 BTC worth over $240 million from BitMEX in the first few hours following the developments of yesterday when the CFTC and FBI filed charges against the exchange. The substantial amount represented about 13% of all Bitcoins that are held on the popular BTC derivatives exchange.

The Glassnode data showed that this is the largest hourly BTC outflow from the exchange. The withdrawals increased in the following hours and the total amount increased to 32,000 BTC or about 19% of all BTC stored on the exchange, were taken out in three batches.
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Glassnode updated that the last batch contained 6000 bitcoins or $63 million which happened hours ago.

According to our data, last night more than 23,200 BTC were withdrawn from #BitMEX addresses in a single hour (~13% of all BTC in their vaults).

That is the largest hourly $BTC outflow from BitMEX we've observed so far.#Bitcoin

Hourly chart: https://t.co/73rfTruwOH https://t.co/T5jbJPZx5O pic.twitter.com/todtRjRK6q

— glassnode (@glassnode) October 2, 2020

The massive withdrawals came as a direct consequence from the news that broke out yesterday when the US Commodity and Futures Trading Commission charged the owners of the exchange Arthur Hayes, Samuel Reed, Gregory Dwyer, and Benjamin Delo with illegally operating the derivatives platform and anti-money laundering violations. The US Attorney for the District of New York Audrey Strauss, indicted the founders for violating the Bank Secrecy Act and also conspiring to violate it. BitMEX issued an official response where they “Strongly disagree with the US government’s heavy-handed decision to bring these charges” so they are planning on defending the allegations.

Update: Another batch of ~6k BTC was withdrawn from #BitMEX in the past hour.

In total, over 32,200 $BTC were pulled from the exchange (~19% of funds) in three larges baches since the announcement.#Bitcoin

Live chart: https://t.co/jlunNHscY3 pic.twitter.com/9oTL0qAaeP

— glassnode (@glassnode) October 2, 2020

Despite their response, however, the crypto space felt the effects almost in a moment and the prices crashed. The crypto community had a divided reaction to the case as some claimed that it’s bad for the industry while others believed that it could have a good result in the long-run. While the CFTC previously filed a civil lawsuit against BitMEX, the FBI is coming after the exchange with criminal charges and the maximum penalty will be 5 years in prison. BitMEX is an extremely popular crypto exchange that introduced perpetual swap contracts for BTC which have now become the main standard in the industry. The exchange is a favorite among the BTC traders because of the ease of access. Before this year, the exchange didn’t require KYC or AML verification but from August this year, they reported implementing mandatory KYC regulations.