In brief

  • The US CFTC filed charges against BitMEX and its founders Thursday.
  • BitMEX reportedly holds $2 billion worth of BTC; Bitcoin’s price fell following the news.
  • Social media reactions focused on Bitcoin’s resilience, potential fallout.

Crypto Twitter is a lively place on even the most average of days. However, on a day in which the United States Commodity Futures Trading Commissions (CFTC) charged cryptocurrency exchange BitMEX and its owners with illegally operating an unregistered trading platform and money-laundering violations, you can be sure the takes will be ample and hot indeed.

Although the price of Bitcoin quickly dropped by about $500 (it has since recovered some ground), some of the top tweets of the day highlighted how resilient it and the wider cryptomarket has been in the face of seemingly major hurdles.

A tweet from crypto trader Moon, for example, noted last week’s $150 million KuCoin altcoin exchange hack alongside the BitMEX news, surmising, “If this doesn't tank Bitcoin or crypto we're going to the literal moon.” Engineer Icebergy had similar sentiments, pointing out that Bitcoin’s price is still above $10,000 despite these recent events.

Still, there’s concern about what the US action against BitMEX will mean for the actual Bitcoin being held by the exchange, last estimated by Coin Metrics to be around 193,000 BTC (about $2 billion worth).

Coin Metrics co-founder and crypto personality Nic Carter tweeted out that figure, and added, “We'll know if the funds are immobilized (they're in a 3/4 multisig setup) at 9am tomorrow ET unless we get word before that.”

Carter noted that if multiple founders are in custody and out of commission, then it could create issues for users trying to withdraw funds—although it sounds like withdrawals are already being processed.

Jameson Lopp, Bitcoin maximalist and co-founder and CTO of Casa, quoted Carter’s initial tweet and commented, “Now we get to see if BitMEX's multisig setup is nation state resistant.” Casa, which provides self-custody Bitcoin services, tweeted, “Today, like every day, is a good day to withdraw your Bitcoin from exchanges.”

BitMEX has already announced plans to fight the charges, but there’s sure to be an impact felt by today’s actions. Larry Cermak, research director for The Block, wrote: “The implications of this will be massive. Some large foreign exchanges still allow US customers to use the exchange without [Know Your Customer] and VPN. That will change VERY quickly.”

But ultimately, crypto Twitter had to have a little bit of fun with today’s announcements. There’s one particularly eye-opening-slash-cringe-worthy bit of the indictment that suggests that co-founder and CEO Arthur Hayes wanted to incorporate the exchange in the East African island nation of Seychelles because it was easier to bribe officials there—it would only cost “a coconut,” he allegedly said.

“Everything about this is just WILD,” commented CoinShares Chief Strategy Officer Meltem Demirors, adding coconut and palm tree emoji for good measure.