In the original blog post, an anonymous account named ‘Hasu’ laid out the argument against the Hong Kong-based exchange with three major accusations:
- “BitMEX trades against their customers”
- “BitMEX weaponizes their server problems”
- “BitMEX monetizes customer liquidations through their insurance fund”
However, in a recent interview with Yahoo Finance UK, Hayes responded to the allegations, stating that BitMEX is a market making desk but functions only to bring liquidity to the market and does not engage in any counter trading against its customers.
Hayes also emphasized that BitMEX doesn’t offer “special access to anyone” and doesn’t make money when customer trades are liquidated.
That being said, BitMEX is by no means a passive player in the space, and regularly makes controversial predictions about digital assets. Most recently, Hayes published a report where he stated that he sees Bitcoin dropping to $2,000 as the “sweet spot,” just weeks after he publicly called Ethereum (ETH) a “bigger shitcoin” than the dollar when prompting users to short the digital currency with ETH/USD perpetual swaps.
Regardless of intentions, BitMEX’s server activity definitely does have an impact on Bitcoin’s price action. For example, Last August, when BitMEX entered a period of scheduled maintenance, Bitcoin’s price spiked nearly $300 in a matter of minutes.
If the allegations are true, BitMEX would not be the first popular exchange to profit off of its users’ trades. We recently reported that Robinhood, the popular commission-free trading app, makes more than 40% of its revenue by selling its user order data to high-frequency trading firms, a practice commonly referred to as payment for order flow.
Photo: Marco Verch / Flickr
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.