BitMEX traders are rushing towards the exits after the Department of Justice levied criminal charges against BitMEX’s Founders and Executives for money laundering, and the Commodities Futures Trading Commission (CFTC) simultaneously charged BitMEX with violations of exchange regulations.
So far 32,000 Bitcoins (BTC) worth $335 million have been withdrawn from BitMEX in less than 24 hours. Notably, for now it seems this surge of withdrawn Bitcoins are not being dumped, and the Bitcoin market is holding its ground near $10,500.
However, another 135,000-170,000 Bitcoins worth $14-$18 billion remain on BitMEX. Some people are saying that this is a sign that a majority of traders remain confident in BitMEX, but the fact of the matter is that BitMEX’s executives are on the run from law enforcement, and once they are captured it seems likely that BitMEX will be forced completely to shut down, since it’s assets will likely be seized.
Also, it is unclear how well BitMEX withdrawals are working at this point, since the company has been thrown into chaos, and that may explain why so much Bitcoin remains on BitMEX.
Therefore, further large outflows of Bitcoin from BitMEX can be expected, and it is quite possible that a large dump of Bitcoins will occur as well.
Basically, traders who only used Bitcoin for speculation on BitMEX will no longer need their Bitcoins, and are likely to dump them.
Thus, the Bitcoin market is shaky right now as large amounts of Bitcoin pour out of BitMEX, and it seems quite possible that Bitcoin’s support at $10,000 will be broken.