Views from the Hehmeyer Trading Desk — Week of September 28, 2020

The week began with no significant news highlights in the crypto space. However, it ended with major happenings, causing the price of Bitcoin to fall. On Thursday, the Commodity Futures Trading Commission (CFTC) announced the filing of a civil enforcement action charging five entities and the three individuals that own and operate the BitMEX trading platform, including Arthur Hayes, Ben Delo and Samuel Reed, with operating an unregistered trading platform and violating multiple CFTC regulations. Related criminal charges against Hayes, Delo, Reed and Gregory Dwyer were brought by the U.S. Attorney’s Office of the Southern District of New York. In response, BitMEX posted a statement stating: “We strongly disagree with the U.S. government’s heavy-handed decision to bring these charges and intend to defend the allegations vigorously. From our early days as a start-up, we have always sought to comply with applicable U.S. laws, as those laws were understood at the time and based on available guidance.” In wake of the charges, Bitcoin outflows from BitMEX were already up with 32,200 BTC (around $337M) moved from the crypto derivatives exchange, which is estimated to be around 19% of the exchange’s total funds, according to Glassnode. This news leaves the crypto world debating on whether the DeFi sector is bound to face the wrath of regulators.

On Friday, Bitcoin and stocks tumbled after President Trump tweeted in the early morning U.S. hours on Friday, that both he and the First Lady tested positive for COVID-19. Bitcoin is down by 1.9%, falling from $10,678 to around $10,400 around the time of the news.

The decentralized exchanges remain in the spotlight, posting a third month of doubling trading volume. In August, trading volume on decentralized exchanges reached $11.6 billion, and subsequently $23.5 billion in September.

Key Crypto Headlines

Co-founders of Major Cryptocurrency Trading Platform BitMEX are Charged with Violating the US Bank Secrecy Act

“Four top executives of major crypto trading platform BitMEX have been charged with violating US anti-money laundering regulations, the Commodity Futures Trading Commission said on Thursday.”

Should DEXs Be Worried After BitMEX? DeFi Founders Weigh in

“The sudden takedown of BitMEX has cast a new light on Ethereum’s decentralized finance (DeFi) markets.”

Decentralized Exchange Volume Rose 103% in September to Record $23.6B Even as Growth Consolidated

“September volume on decentralized exchanges recorded its third consecutive month of doubling the trading volume from the previous month after a 160% rise in August, according to Dune Analytics.”

Bitcoin Rises Against USD After Mnuchin Promises Second Stimulus Check

“$1,200 checks for Americans will definitely feature in any deal, says Steven Mnuchin, as DXY weakness opens up opportunities for Bitcoin gains.”

Twitter’s Jack Dorsey Takes Aim at Coinbase’s Apolitical Stance

Twitter CEO Jack Dorsey has called out Coinbase for seeking to suppress political activism and suggesting employees who think differently should leave.”

Russian ‘Ex-Oligarch’ Reportedly Backing a New DeFi Project

“The former owner of a Russian bank seems to be pivoting to the decentralized space.”

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