According to sources citing people familiar with the matter speaking to Bloomberg, the CFTC suspects that BitMEX, which is registered in the Seychelles, allowed U.S. residents to use its platform to trade.
Under current law, the U.S. is one of the countries excluded from using BitMEX and similar crypto-based financial services, but users may have sought to circumvent the geoblock using services such as VPNs.
The investigation, details of which have not yet been confirmed by either BitMEX or the CFTC, came to light on social media via Bloomberg journalist Tim Culpan.
Bitcoin (BTC) was under heavy pressure as the news broke Friday, dropping around $500 in minutes to target $10,000.
This story will be updated.
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