Chainalysis classifies BitMEX as a high-risk exchange

The analytics firm Chainalysis has labelled the cryptocurrency derivatives exchange BitMEX as a high-risk platform amid issues with U.S. regulators.

As reported by The Block, on October 5 Chainalysis reached out to its clients and told them that starting on October 13 the service will label BitMEX as a “high-risk exchange”.

Now the Chainalysis KYT monitoring tool will respond to transfers related to BitMEX.

“Any transfers from October 1 onward should be treated as high-risk,” according to a Chainalysis letter to clients.

The company also urged compliance teams to review earlier transfers.

A Chainalysis spokesperson said clients can assess the level of risk themselves. However, the company typically classifies an organisation as high-risk if criminal charges have been brought against it or its executives, he said.

Such labeling could have a material impact on the willingness of many institutions to do business with the exchange. LMAX Group chief executive David Mercer said he “does not know of any serious organisations willing to continue trading on the platform”.

As reported, the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against BitMEX and its owners.

They are accused of operating an unregistered trading platform and violating CFTC rules on KYC/AML procedures.

Additionally, the U.S. Department of Justice charged the exchange’s executives with breaches of the Bank Secrecy Act.

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