Bitcoin ‘Dr Doom’ Nouriel Roubini Made A ‘Massive’ BitMEX Warning

By July 18, 2019Bitcoin Business
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Bitcoin and cryptocurrencies have dived the traditional financial industry and economists, with some arguing bitcoin and crypto is incompatible with the current system and others more open to the new technology.

The bitcoin price, well known for its extreme volatility, has not helped matters, with bitcoin critics pointing to wild swings on crypto markets as evidence of price manipulation and fraud.

Few have been as outspoken against bitcoin and cryptocurrencies as Nouriel Roubini, a professor of economics at the New York University Stern School of Business, who has recently stepped up his feud with Seychelles-registered bitcoin and crypto exchange BitMEX, suggesting it's involved in "systematic illegality."

Nouriel Roubini is known as Dr Doom for his gloomy economic predictions and has been an outspoken critic of bitcoin and cryptocurrencies.

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"BitMEX insiders revealed to me that this exchange is also used daily for money laundering on a massive scale by terrorists and other criminals from Russia, Iran, and elsewhere," Roubini wrote in a blog post. "The exchange does nothing to stop this, as it profits from these transactions."

Roubini, who clashed with the chief executive of BitMEX, Arthur Hayes, at the Asia Blockchain Summit earlier this month, has previously branded bitcoin "overhyped" and a "cesspool."

"Some of the biggest crypto players may be openly involved in systematic illegality," Roubini wrote, adding: "BitMEX, an unregulated trillion-dollar exchange of crypto derivatives that is domiciled in the Seychelles but active globally ... involves peddling to 'degenerate gamblers' (meaning clueless retail investors) crypto derivatives with 100-to-one leverage."

So-called margin trading, where traders can borrow against their deposits on an exchange, has been on the rise this year and may be having an effect on the bitcoin price as investors have a larger pot of funds to speculate with.

Earlier this month, Malta-based Binance, the world's largest bitcoin and cryptocurrency exchange by volume, allowed traders to borrow up to three times their deposit, while Hong Kong-based Bitfinex is allowing loans of 100 times deposits.

Binance's chief executive Changpeng Zhao, who's often known simply as CZ, warned that this margin trading may be somewhat behind the latest bitcoin and cryptocurrency rally and as use of margin trading increases, already extreme bitcoin price volatility could get even worse.

The bitcoin price has been climbing this year as a result of interest in bitcoin an crypto from some of the world's biggest tech companies.

Hayes hit back at Roubini's latest attack, rejecting "any allegations of criminality, manipulation or unfair treatment of our customers, who are at the center of everything we do."

"BitMEX provides safe, fast, professional and liquid ways for those who see the potential of crypto and to trade and hedge cryptocurrency risk,“ Hayes told Bloomberg, a financial newswire. "We continue to monitor all legal and regulatory developments around the world and will comply with all applicable laws and regulations."

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