Global cryptocurrency exchange BitMEX has closed its platform to users from Hong Kong, Bermuda and the Seychelles, determining users’ location based on the IP address of attempted connections.
According to a press release issued by BitMEX on August 19, 2019, users from these locations will be blocked because this is where employees and offices affiliated with HDR Global Trading Limited, the company that owns and operates BitMEX, are located. Apparently, the move to block these locations is an attempt to remain compliant.
“We have decided to restrict access to BitMEX for users in the jurisdictions in which HDR-affiliated employees and offices are located,” according to the release. “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 population of around 150,000, while Hong Kong has a population of more than 7 million. Considering that Hong Kong in particular has seen a marked increase in the value of bitcoin due to political turmoil, it stands to reason that the restriction actually could affect more people than BitMEX is letting on.
The restrictions may also be connected to a months-long probe conducted by the U.S. Commodity Futures Trading Commission (CFTC) into BitMEX’s client trades. As BitMEX is not registered with the CFTC, the commission wants to know the extent to which U.S. citizens have been able to illegally trade on BitMEX’s platform by using VPNs. Banning trade in regions where there are HDR offices might be a low-cost way of making it more difficult for Americans and users of other banned nationalities to access the site.
At this point, however, anything beyond what BitMEX has officially released about the move is speculatory.