“BitMEX is not registered with the AMF and is therefore not authorised to have activities in the province of Quebec. We informed this company that its activities were illegal.”
That’s what AMF’s director of media relations said after Quebec’s financial services authority, the Autorité des marchés financiers (AMF), sent a letter to the exchange in early 2018 asking it to close all accounts linked to Quebecois.
AMF now claims “all accounts linked to customers in Quebec were immediately closed” according to the South China Morning Post.
How they verified that, however, is not clear because Bitmex does not require any identification as far as we are aware. So at a practical level – even if they wanted to – they probably can’t keep out Quebecians who can just VPN.
Bitmex’s CEO Arthur Hayes did not reply to our request for confirmation that all accounts linked to individuals in Quebec have been closed. Their terms of service, however, do state:
“Residents of the United States of America or Québec (Canada) are prohibited from holding positions or entering into contracts at BitMEX.
Residents of Cuba, Crimea and Sevastopol, Iran, Syria, North Korea and Sudan, or any other jurisdiction where the services offered by BitMEX are restricted are also prohibited from holding positions or entering into contracts at BitMEX.
If it is determined that any BitMEX trading participant has given false representations as to their location or place of residence, BitMEX reserves the right to close any of their accounts immediately and to liquidate any open positions.”
It is not clear just how keenly such terms of service are enforced. Anecdotally, their approach appears to be quite lax at least for US residents.
Bitmex itself is registered in Seychelles with its main offices in Hong Kong, bringing them outside of any US or Canada jurisdiction.
That hasn’t stopped US authorities, however, from trying to enforce their own laws on what is basically a website.
The prominent example is Bitfinex, which although based in Hong Kong at the time, still received a fine from US’ CFTC.
Their preferred method of enforcing such fine appears to have been a banking blockade which has increased delays in fiat transfers in and out of Bitfinex.
The exchange still operates, however, and although slowly, fiat does still appear to be moving. While in the case of Bitmex, any enforcement to at least inconvenience would be difficult because they don’t deal in fiat at all.
Which is perhaps why the regulator is now making these comments to presumably try and put some pressure on Bitmex, but whether anything will change remains to be seen.