BitMEX Sells All BCH
BitMEX (Bitcoin Mercantile Exchange), a major cryptocurrency derivatives trading platform, announced on December 28th that it had sold all BCH (Bitcoin Cash) given to its customers since BCH’s creation on August 1st 2017. The trading platform also said that it had credited its users’ bitcoin wallets with the equivalent amount of bitcoin resulting after the sale. This news is not a surprise because BitMEX had already stated, on November 15th,, that it would be doing so by the end of year (2017).
Reasons behind the Sell Off
So, what could caused BitMEX to sell off all its customers’ BCH? According to its blog post, it does not support the way Bitcoin Cash was forked. The blog says, “[it] does not agree with contentious hard forks” and considered it to be “dangerous”. It also doesn’t approve of the way Bitcoin Cash was forked. Ultimately, according to BitMEX, it’s unfair to users and their business who have to bear the costs of these controversial moves.
BitMEX also makes it clear that it is not against all hard forks. It even has an an official policy on Bitcoin hard forks. Should crypto trading platforms be allowed to do this with their customers’ investments? Doesn’t the customer have any decision-making power? It’s understandable that crypto trading platforms don’t have to agree with or support everything that happens in the crypto-community. However, shouldn’t the users/customers also have some control?
Is BitMEX being biased?
It can be argued that BitMEX, which handles the bulk of Bitcoin-to-Dollar trades worldwide, might be favoring bitcoin over bitcoin cash. Shouldn’t trading platforms try to be as objective or neutral as possible? Wouldn’t it have been better if the company had tried to ask their customers, maybe through some type of short survey, what they think of the situation. And, what would they like BitMEX to do with THEIR assets/investments?
Crypto-Markets Unaffected by BitMEX’s Selloff
Although BitMEX selling all its BCH might have been a significant move, Bitcoin and Bitcoin Cash appeared to follow the same trading pattern (CoinMarketCap). However, this was not the case when Coinbase added support for Bitcoin Cash. This move led to a major Bitcoin prices while BCH prices surged dramatically. There were even accusations of insider trading. What we can learn from this is that, in the end, the crypto investors and traders have to suffer.
Does the Crypto-Market Need Regulation?
Does this warrant some type of regulatory framework, which will protect crypto-enthusiasts? Should exchanges be regulated by some authority? Should the crypto-market be regulated as well? As we begin the new year, the crypto-market is still very much in its infancy. Therefore, it is more than likely that 2018 for the crypto-world will bring its share of problems. It’s the manner in which these problems are solved that could affect crypto-market – negatively or positively.