{"id":80590,"date":"2023-06-22T13:06:46","date_gmt":"2023-06-22T10:06:46","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=80590"},"modified":"2025-09-11T17:54:03","modified_gmt":"2025-09-11T14:54:03","slug":"bitmex-chief-urges-crypto-exchanges-to-drop-market-makers","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/bitmex-chief-urges-crypto-exchanges-to-drop-market-makers\/","title":{"rendered":"BitMEX chief urges crypto exchanges to drop market makers"},"content":{"rendered":"<p>Bitcoin exchanges that profit from <a href=\"https:\/\/ru.wikipedia.org\/wiki\/%D0%9F%D1%80%D0%BE%D0%BF-%D1%82%D1%80%D0%B5%D0%B9%D0%B4%D0%B8%D0%BD%D0%B3\">prop-trading<\/a> should abandon the services of internal market makers. This was <a href=\"https:\/\/www.theblock.co\/post\/235881\/crypto-exchanges-market-makers-bitmex\">stated<\/a> by BitMEX acting CEO Stefan Lutze.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cThere is no longer any need for this. You have a critical mass,\u201d he explained.<\/p>\n<\/blockquote>\n<p>In his view, large venues already have sufficient high-frequency traders and private trading activity.<\/p>\n<p><a href=\"https:\/\/www.theblock.co\/post\/235881\/crypto-exchanges-market-makers-bitmex\">Earlier reports on Crypto.com&#8217;s prop-trading unit<\/a>, whose employees had pledged not to discuss their work.<\/p>\n<p>Lutze openly stated that the company also hires internal traders. They operate for a separate legal entity \u2014 Arrakis Capital, which was once a major internal market maker for BitMEX.<\/p>\n<p>Today Arrakis&#8217;s functions are limited to treasury operations. According to Lutze, with only a handful of employees, the platform is technologically and organisationally separated from the exchange.<\/p>\n<p>According to the head of the company, Arrakis performs the following functions:<\/p>\n<ul class=\"wp-block-list\">\n<li>converting commissions into fiat currency;<\/li>\n<li>hedging BitMEX&#8217;s exposure to assets held as reserves;<\/li>\n<li>creating markets for the native BMEX token.<\/li>\n<\/ul>\n<p>Lutze noted that the division earns a &#8220;negligible profit&#8221;\u2014up to $100 000 a month\u2014from holding treasury bills.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cMost other exchanges probably did the same; it was largely market practice. If you wanted reliable liquidity for your order book, you had to do something yourself. There was no service provider,\u201d he explained.<\/p>\n<\/blockquote>\n<p>According to him, all trading platforms hire internal traders, but after <a href=\"https:\/\/forklog.com\/en\/news\/ftx-group-files-for-bankruptcy-sam-bankman-fried-resigns-as-ceo\">the collapse of FTX<\/a> this practice began to attract more attention.<\/p>\n<p>Exchanges that charge a small fee for transactions, or operate without one, can also be seen as a &#8220;red flag&#8221;, signaling that their role is primarily to attract trading flow for a market maker, Lutze warned.<\/p>\n<p>Back in December 2022, BitMEX <a href=\"https:\/\/forklog.com\/en\/news\/bitmex-unveils-liability-verification-solution\">implemented<\/a> a solution to confirm its obligations. The company agreed to provide information about its reserves on a weekly basis.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin exchanges that profit from prop-trading should drop internal market makers. This was stated by BitMEX&#8217;s acting CEO Stefan Lutze.<\/p>\n","protected":false},"author":1,"featured_media":80591,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[788,1138],"class_list":["post-80590","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-bitmex","tag-opinions"],"aioseo_notices":[],"amp_enabled":true,"views":"28","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/80590","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=80590"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/80590\/revisions"}],"predecessor-version":[{"id":80592,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/80590\/revisions\/80592"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/80591"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=80590"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=80590"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=80590"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}