It is rumored that BitMEX, the former leader of cryptocurrency contract exchange, is looking for sale! Can it rise again?

BitMEX, a former cryptocurrency derivatives trading giant, is seeking to sell, which has attracted widespread attention from the industry. According to CoinDesk, BitMEX has commissioned Broadhaven Capital Partners to assist with its sale at the end of last year and is currently in preliminary negotiations with potential buyers. The final transaction price will depend on the market's expectations for the outlook for the cryptocurrency industry and the recovery potential of BitMEX.

How did BitMEX decline?

BitMEX was founded in 2014 by three founders including Arthur Hayes, and is registered in Seychelles. It was once a leader in cryptocurrency derivatives trading, and its success was:

• Gradually provide highly leveraged derivatives trading: BitMEX is the first to launch a highly leveraged Bitcoin perpetual contract with a maximum leverage of up to 100 times, attracting many traders.
• Trading volume was once the world's leading: Especially in 2018, BitMEX's daily trading volume hit new highs, even surpassing some traditional financial markets.
• Stable and reliable technology: Its trading engine has advanced technology and can efficiently handle high-frequency trading and large-scale orders.
• Establish an insurance fund mechanism: BitMEX's unique insurance fund mechanism is used to compensate users' losses from liquidated positions.

However, BitMEX's glory is a thing of the past, and its trading volume has been surpassed by many competitors. The main reasons for its decline include:

• Regulatory and Legal Risks: BitMEX is under investigation by regulators for lack of sound KYC and AML measures. In 2020, the US CFTC and the Justice Department filed a lawsuit against it, and BitMEX eventually paid a $100 million settlement.
• Risks and controversies of high-leverage trading: Although high-leverage trading attracts speculators, it also leads to frequent disputes on liquidation and liquidation mechanisms.
• Intensified market competition: Trading platforms such as Binance, Bybit and OKX have risen, providing more competitive services and stronger compliance.
• Management turmoil: During the legal litigation, there were changes in BitMEX management, resulting in internal instability.

The current situation of BitMEX reflects the reality of stricter regulation in the cryptocurrency industry and increasingly fierce market competition. Its ultimate fate remains to be seen.

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