The CEO of BitMEX took time to defend his company from a rash of online criticism in an interview with Yahoo Finance UK.
Responding to a variety of allegations put forth in a blog post published on October 22nd, Arthur Hayes said BitMEX does not give anyone special access, does not engage in trading against customers, and makes no money when trades are liquidated.
The peer-to-peer bitcoin futures trading platform has rapidly become a heavy player in its market since being founded in 2014.
However, it has been in the headlines recently due to an anonymous Medium post that made a number of pointed allegations against the exchange.
‘Exploring The Biggest Concerns’
In late October, “independent cryptocurrency researcher” named “Hasu” wrote a long-form Medium post that made a number of allegations reportedly based on customer suspicions.
In the post, Hasu alleged BitMEX secretly trades against customers, gives preferred access to specific traders once servers come back online, and collects money once it liquidates the positions of clients.
Another allegation leveled by Hasu was that BitMEX places excess margin into an insurance fund.
At the start of the post, Hasu wrote how BitMEX has a “hard time acting ethically once it gets in their way of making more money.” He said this was an issue because it “doesn’t submit to any regulator” since it is based in the Seychelles.
Towards the end, Hasu listed a number of suggestions BitMEX could take. These included the construction of a colocation center where clients could physically connect to servers, putting a hard cap on the company insurance fund, and allowing “products like Ups and DOWNs to be traded against other users.”
According to Yahoo Finance UK, Hayes said BitMEX does not trade against clients even though it has a market making desk. According to Hayes, the purpose of the desk is to provide market liquidity.
Hayes also said the desk remains in complete seclusion from “the rest of the employees.”
When asked about the weaponization of server issues, the CEO said the exchange does not give anyone special access and noted how the biggest priority for the company was to tackle ongoing problems with servers, since BitMEX often gets more orders than it can handle.
Hayes also remarked the company does not “make money when people get liquidated.”
In a November 12th Tweet, Hasu wrote how Hayes “denied my concerns” and did not talk about the suggestions to “ameliorate the concerns going forward.”
Arthur Hayes denied my concerns about @BitMEXdotcom in an interview with @YahooFinance. Unfortunately, he didn't address any of the suggestions I made to ameliorate the concerns going forward. If all is fair like he says, most would be cheap to implement.https://t.co/B8g0xkitrE— Hasu (@hasufl) November 12, 2018
In a follow up, Hasu explained how “we need more transparency around these issues, especially the fund and desk.”