BitMEX to close exchange after 11 years

BitMEX, the cryptocurrency derivatives exchange owned and operated by HDR Global Trading Limited, will close after 11 years in business, according to a statement published on the company’s website. The exchange has stopped opening new accounts with immediate effect and has instructed users to close open positions and remove funds before its 23 September closure deadline.

The company said the decision followed a strategic review of both BitMEX and the wider crypto industry by HDR Global Trading’s board. In the statement, BitMEX said the closure was a difficult decision and had not been taken lightly.

The wind-down affects a platform that was launched in 2014 and became known for introducing the 100-times leverage perpetual swap, according to Finextra. Leverage at that level allows traders to take positions far larger than the collateral they post, amplifying both gains and losses. Perpetual swaps became one of the main instruments in crypto derivatives markets, with BitMEX’s version described by Finextra as the most traded product in the industry.

Finextra reported that BitMEX had more recently lost ground to faster-moving rivals and a newer group of decentralised derivatives venues. The decision to close follows management changes at the exchange, with Finextra reporting that the company lost its chief executive, chief financial officer and head of growth three weeks before the wind-down announcement.

User withdrawals and remaining balances

Under the closure process described by BitMEX, customers must close any open trading positions and withdraw their assets by the closure time on 23 September. The company did not announce an expedited withdrawal service and warned users not to trust anyone claiming to offer one.

Customers who leave assets on the platform after the deadline will face an administrative charge, according to BitMEX. The fee will be either the equivalent of $50 or 1% per year of the balance left in the account, whichever is greater. BitMEX said the charge will be applied monthly.

The fee structure creates a cost for dormant or unwithdrawn balances after the exchange stops operating. For users, the operational priority is the orderly closing of positions before the deadline, because open leveraged trades can expose account holders to market movements until they are closed or otherwise settled.

Fraud warning during wind-down

BitMEX also warned that the closure could attract fraud attempts aimed at customers. The exchange said bad actors may try to exploit uncertainty around the wind-down and urged users to watch for phishing messages linked to the announcement.

The company said users should be alert to messages promising priority or faster withdrawals. BitMEX said no accelerated withdrawal process is available.

The closure marks the end of one of the better-known early venues in crypto derivatives. Its exit comes as trading activity in digital asset derivatives has spread across centralised exchanges and decentralised platforms, increasing competition for liquidity, customers and product design.

This story draws on original reporting from Finextra Research.