Crypto exchanges record massive Bitcoin withdrawals as investors move into long-term holding

Leading Bitcoin derivatives exchange BitMEX has lost close to 40,000 BTC in rushed withdrawals following the recent indictment of its founders, including CEO Arthur Hayes, by the Commodities Futures Trading Commission (CFTC).

On-chain analysis firm Glassnode has been sharing continuous updates showing increased Bitcoin outflow from BitMEX since Thursday after the CTFC accused Hayes and other co-owners of conducting illegal transactions and enabling money laundering activities.

The Hong-Kong Based BitMEX will be the first and largest cryptocurrency exchange to face the CFTC in court over criminal activity allegations. According to Glassnode’s latest update, there’s been an outflow of close to 40,000 BTC on BitMEX, in over 24 hours since the announcement.

“#Bitcoin outflows from BitMEX addresses continue- our data shows that in the past hour 7.200 BTC were withdrawn. The total amount pulled from the exchange over the past day is now nearly 40,000 $BTC.”

Largest Hourly Withdrawal on BitMEX

Within hours of the announcement, however, investors withdrew 23,200 BTC, representing 13% of total Bitcoin in BitMEX out of the exchange in just one hour, making this the biggest hourly outflow of Bitcoin in the exchange’s history.

“According to our data, last night more than 23,200 BTC were withdrawn from #BitMEX addresses in a single (~13% of all BTC in their vaults. That is the largest hourly outflow form BitMEX we’ve observed so far.”

Glassnode Data also indicates that before its indictment, BitMEX held around 1% of the total circulating Bitcoin supply (170,000 BTC) worth $1.8 billion.

“According to our data, 170,000 $BTC (1.8 billion USD) are being held in #BitMEX wallets. That’ almost 1% of the circulating #Bitcoin Supply.”

CFTC Seeks To Permanently Disband BitMEX

CFTC stated that it is working hard to protect the integrity of markets by regulating and indicting lawbreakers in both the traditional and digital assets markets. The regulatory body added that it will recommend that the court force BitMEX pay damages to affected customers and revoke its trading license, permanently.

“In its continuing litigation against the defendants, the CFTC seeks disgorgement of ill-gotten gains, civil money penalties, restitution for the benefit of customers, permanent registration and trading bans and a permanent injection from the future of violations of the commodity exchange ACT (CEA).”

CEO Arthur Hayes, and one of the Co-founders Samuel Reed have been arrested, with the remaining two, Benjamin Delo and Gregory Dwyer still at large.