International cryptocurrency exchange BitMEX has closed its platform to clients from Hong Kong, Bermuda, and Seychelles, getting users’ area based on the IP address of attempted connections.
A press release issued by BitMEX on August 19 stated that clients from these areas would be blocked since this is often where staff and offices connected with HDR Global Trading Limited, the company that owns and manages BitMEX, are located. Clearly, the move to ban these areas is an attempt to stay compliant.
“We have decided to restrict access to BitMEX for users in the jurisdictions in which HDR-affiliated employees and offices are located,” the press release stated. “Seychelles, Hong Kong and Bermuda will be added to the list of jurisdictions already restricted from access to BitMEX. This change will have no financial impact on the business and will affect very few people. The BitMEX team will be reaching out to those who are affected.”
The Seychelles and Bermuda together have a populace of roughly 150,000, while Hong Kong has a populace of over 7 million. Considering that Hong Kong has explicitly seen a marked increase in the value of bitcoin due to political turmoil, it stands to reason that the limitation really might affect more individuals than BitMEX is letting on.
The confinements may moreover be associated to a months-long probe conducted by the U.S. Commodity Futures Trading Commission (CFTC) into BitMEX’s client trades. As BitMEX isn’t enlisted with the CFTC, the commission needs to know the degree to which U.S. citizens have been able to illegally trade on BitMEX’s platform by utilizing VPNs. Forbidding trade in locations where there are HDR offices may well be a low-cost way of making it more troublesome for Americans and clients of other prohibited nationalities to get to the site.
At this point, however, anything beyond what BitMEX has formally released about the move is speculatory.