Bitmex is an internet-based trading platform which uses Bitcoin as its sole currency. The Exchange is owned by HDR Global Trading, a company established under International Business Companies Act of 1994 in Seychelles.
Bitmex stands for Bitcoin Mercantile Exchange and operates out of HongKong. The company was co-founded in 2015 by Arthur Hayes, a Wharton alumni and an equity derivatives trader, Ben Delo, an Oxford graduate and a specialist in creating high-frequency trading systems and Samuel Reed, a computer science graduate from Washington & Lee University and a programmer.
The company is owned by the three co-founders and its term of use are construed as per the English Common law. Since it is registered under the International Business Companies Act in Seychelles, and the country does not regulate Bitcoin, Bitmex is not under regulatory watch.
Bitmex runs purely on Bitcoins and thus is not limited to currency regulations of any country. Bitcoin transactions are independent of the user’s identity, and so anyone can use it.
However, owing to the strict financial regulation in the US, people who live in the United States are not allowed to sign up for Bitmex. The company uses IP check to verify you are based out of US when you register. A few traders have got around this problem by signing up with a VPN. But it is not recommended as there are enough alternate exchanges for US-based traders.
Owing to the lack of regulation on Bitcoins, Bitmex does not come under any specific regulatory authority. There is no FDIC or an equivalent deposit guarantee either.
But then, Bitmex is not for people who are looking for a haven for their savings. Bitmex is not for beginners and certainly not for crypto newbies. It was designed from the ground up to be an equivalent to that of Bloomberg terminal favoured by high-frequency traders.
Bitmex uses highly sophisticated algorithms for its trading and their security is top notch. It is built on kdb+, a favourite of major banks. The Exchange has a multi-level security including manual verification of withdrawals to ensure zero chance of theft or hack.
Even their emails are encrypted by PGP encryption to ensure the content of the messages is not intercepted.
Bitmex has risen to the top of the Trading Exchange list owing to their trustworthy systems, 100X leverage and anonymity provided by Bitcoin. It is one of the hottest derivative exchanges right now.