Spain’s Watchdog Issues a Notice Against Crypto Exchanges Bybit and Huobi for Unauthorized Operation

Spain’s Watchdog Issues a Notice Against Crypto Exchanges Bybit and Huobi for Unauthorized Operation

Spain’s financial regulator, the National Securities Market Commission (CNMV), has issued a warning notice against 12 companies that include cryptocurrency exchanges Bybit and Huobi.

According to the notice, the warning has been given because these institutions are not registered in the corresponding registry of this Commission, and as such, they are not authorized to provide investment services or other activities subject to the government agency’s supervision.

However, it does not necessarily mean that activities are suspended, reported the local publication. It said that commission warnings are common and are executed as a measure to prevent possible cases of scams. In late 2019, CNMV had also warned about four unauthorized entities operating in Spain.

Besides Huobi and Bybit, other companies mentioned in the notice include The Market Limited, Skyway Capital, Profit Assist, N2 Group, Markets EU, Markets Cube, Liberty Sky, Financial Resident, Expertise Trader, and Dsdaq Market.

In the Bitcoin futures market, both Huobi and Bybit are among the top five in volume and account for 5.87% and 11.75% of the open interest on Bitcoin futures’ market share respectively.

In the spot market, TokenInsight estimated Huobi’s trading volume at $1.16 trillion in the second quarter, beaten only by Binance’s $3.57 trillion. However, the value of its native token HT burned dropped 54% from June to $22.3 million, which the exchange said is a “natural response” to market trends.

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Author: AnTy

Bitcoin Shorts Get Annihilated, OI Drops by 50k BTC from Last Week

While Bybit Bitcoin’s futures had the biggest drop of 15.59% in OI, followed by Binance’s 12% in the past 24 hours, Bitfinex, FTX, and CME had the biggest increase of 12.81%, 11.54%, and 11.86%, respectively.

Bitcoin price surged to nearly $40,000 in a strong upwards move, late on Sunday or early Monday. This represents a nearly 36% jump in price since the $29,300 low last Tuesday.

While several factors like Alameda Research putting in a bottom by “buying a LOT” at the lows, Tesla CEO Elon Musk announced his bullishness for crypto, and speculation over Amazon’s potential involvement in the cryptocurrency sector contributed to this bullish strength, shorts have a significant part to play in this.

As we have been reporting for the past month, the funding rates on the perpetual contracts have been staying in the negative, with the market extremely short on BTC. At the same time, open interest continued to climb sharply.

And finally, an epic short squeeze happened.

In the past 24 hours, 102,558 traders have been liquidated for $1.14 billion, with nearly $945 million of it belonging to shorts, as per Bybt.

The figure is expected to be much higher given that Binance had stopped showing its real liquidation numbers and is currently accounting for less than 20% of all liquidations when it used to be about half, much like Bybit.

“Bitcoin shorts just got blown out. Quarterly basis popped from 5% to >10% briefly,” noted trader and economist Alex Kruger.

Amidst this, Binance and FTX have reduced their leverage offering from more than 100x previously to now only up to 20x. Andrew Kang, Mechanism Capital, said,

“Usually, big short squeezes like we saw on BTC today bleed out, but this continued upward momentum is pretty indicative of shorts/stables being price-insensitive buyers trying to scoop any liquidity they can.”

The result of this short squeeze can also be seen in open interest. Total OI on Bitcoin futures has crashed by 50k BTC — currently at 349.7k BTC from over 400k BTC less than a week back.

In the past 24 hours, OI on Bybit Bitcoin’s futures had the most significant drop of 15.59%, followed by Binance’s 12%, which leads the futures space. OI on Binance is now at 79.1k BTC, down from 101.37k BTC on June 20, which increased 78% in nearly a month as new short positions were opened.

Meanwhile, Bitfinex, FTX, and CME had the most significant increase of 12.81%, 11.54%, and 11.86%, respectively, as of writing.

In the case of Ether, Binance is the only with a decrease, of only about 3.67%, though, in OI. Total Ether OI is now 2.54 million ETH, down from 2.94 million ETH in less than a week. SplitCapital said,

“Make no mistake, the real pain won’t come from shorts rather the absurd amount of people that are parked all in stablecoins. They won’t chase till 40k breaks.”

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Author: AnTy

Canadian Regulator Takes Action Against Bybit Over Alleged Violations Of Securities Law

Canadian Regulator Takes Action Against Bybit Over Alleged Violations Of Securities Law

The Ontario Securities Commission is pursuing a regulatory action against Bybit Fintech Ltd, a company incorporated in the British Virgin Islands, that operates a cryptocurrency platform in the country.

The regulator accused Bybit of disregarding and flouting the Canadian securities law.

Regulator Files Statement Of Allegations Against Bybit

According to the statement of allegation filed by the regulator, Bybit failed to comply with the registration requirements even though the OSC cautioned unregistered trading platforms in March.

The OSC had issued an April 19 deadline for crypto exchanges to register before offering derivatives products in Ontario, but Bybit failed to do so.

As a result, the regulator has now added Bybit to its investor warning list and has set a hearing date of July 15. The OSC said,

“Entities such as Bybit, which flout this compliance process, expose Ontario investors to unacceptable risks and create an uneven playing field within the crypto asset trading platform sector.”

Potential penalties include payment of not more than $1 million in fines for each failure to comply with Ontario securities law. It may also include penalties stipulating Bybit to cease trading for a given period of time.

OSC’s action against Bybit comes after it took similar enforcement action against another exchange, KuCoin, earlier this month. Last month, the OSC also alleged that crypto exchange Poloniex had not completed its registration process.

The regulator’s reasons have remained the same across all three instances – the exchanges offered securities and derivatives to Ontario residents without complying with the province’s securities laws.

Founded in 2008, Bybit is one of the biggest crypto exchanges with millions in trading volume. Headquartered in Singapore and registered in the British Virgin Islands, Bybit is the third-largest Bitcoin futures exchange by open interest.

Bybit Faces Similar Enforcement Action In Japan, UK

Regulators around the world have become more cautious about cryptocurrency services as exchanges, and trading platforms are now more scrutinized.

Bybit seems to be familiar with these actions. The exchange has not only gotten in trouble in Canada but is also having issues with regulators in Japan.

A few weeks ago, the crypto derivatives platform received a warning from Japan’s Financial Services Agency (FSA) over unregistered operations.

Bybit has also previously received a similar warning in the United Kingdom. Earlier on Feb. 24, the UK Financial Conduct Authority (FCA) issued a notice alerting the public that the exchange has been operating in the UK without authorization.

A week later, Bybit announced on March 5 that it would stop servicing UK residents from March 31.

Despite these recent hurdles, Bybit still ranks in the top five in terms of the largest Bitcoin (BTC) futures exchanges volume of trades.

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Author: Jimmy Aki

Crypto Exchange Bybit Suspends Trading for UK Customers Due to FCA Derivatives Ban

Crypto Exchange Bybit Suspends Trading for UK Customers Due to FCA Derivatives Ban

Crypto exchange platform Bybit is set to cease operations for UK-based customers citing the recent regulations issued by the regulator in regards to crypto derivatives.

In an official announcement, the firm stated that it would end its services to UK customers on March 31. The firm said the decision was reached in efforts to adhere to the regulations issued by the Financial Conduct Authority (FCA). The exchange said,

“To comply with the Financial Conduct Authority’s (FCA) ban on crypto derivatives, Bybit will cease to provide services to customers from the United Kingdom.”

The firm is now advising its customers to close any positions and withdraw their entire funds before month-end.

Derivatives are financial instruments that monitor the prices of a given asset which in this case is cryptocurrency. Clients are not supposed to have any spot crypto when purchasing these products. Usually, high leverage is used for these products highly popular in the crypto space.

Last year, the UK financial regulator, FCA, prohibited the trading of crypto derivatives and exchange-traded notes (ETNs) in a move that sent shock waves in the market. The regulator said that these products were not suitable for retail clients as the underlying assets are highly volatile in nature.

The regulator started implementing the ban in January this year, but various firms such as Bybit still went on with the basic operations to the existing customers. However, this is set to change as customers based in the UK will not be permitted to create new accounts. Bybit stressed that sign-ups from UK phone numbers as well as IP addresses are henceforth restricted.

Bybit is ranked as one of the largest crypto derivatives in the world. CoinGecko reports that the exchange has transacted above $11 billion over the past day for just ten trading pairs.

The close of operations for UK-based clients is a major blow to the company as more than 5% of all the site’s visitors are from the UK.

Noteworthy, the firm stated that it was in talks with the UK authorities to find a solution for the existing and new clients.

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Author: Joseph Kibe

CME, Binance, and Bybit Captures BitMEX’s 24% Drop in Bitcoin Futures Market Share

CME, Binance, and Bybit Captures BitMEX’s 24% Drop in Bitcoin Futures Market Share

Last week was a historical one for Bitcoin as the world’s largest digital asset smashed through $20k and hit a new all-time high above $24,000. Currently, in its price discovery mode, all the pullback BTC is seeing hasn’t taken us to even $21k.

This price action, the largest weekly percentage gain of 22% since April 2019, has pushed the volume on spot exchanges to over $10 billion for the first time in history.

Over $1 billion worth of short positions got liquidated in the futures market over just two days last week. Leveraged traders have also been upping their risk profiles while the premiums to spot continues to decline.

This week, another burst of volatility can be seen in the market as Bitcoin futures contracts for December expire on Friday. Interestingly, the

Bitcoin futures market had some significant changes this year. The popular derivatives platform BitMEX, which commanded 34% of the market share at the beginning of this year, is the biggest loser of 2020. Currently, BitMEX occupies just 10% of the Bitcoin futures market, as per Arcane Research.

This 24% loss in the market share has resulted from the U.S. Commodity Futures Trading Commission (CFTC) and Department of Justice (DOJ) charging the exchange and its founders in October with illegally operating a crypto derivatives trading platform. These civil and criminal charges resulted in the exchange losing its edge in the market.

Open interest on BitMEX is currently around $720 million compared to more than $1 billion on OKEx, CME, Binance, and Huobi. BitMEX’s loss resulted in Binance, CME, and Bybit’s gain as all three of them strengthened their position in the market this year.

The biggest gainer is Binance, which recorded an increase of 12% in its market share. With a 9% jump, CME comes behind the leading spot exchange, but this regulated platform has more OI at $1.43 billion compared to Binance $1.38 billion. CME mainly sees increased traction thanks to all the institutional attention towards BTC.

Bybit’s OI is hovering just under the $1 billion mark; the platform now captures 11% of bitcoin futures market share, up from only 6% at the beginning of this year.

Among the losers, Huobi lost 4% of its market share while OKEx’s dropped 8%, although the latter has the highest OI at $1.53 billion, as per data provider Skew.

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Author: AnTy

Exchanges Try to Capture Massive Revenue: ByBit Launches Fiat Onramp & Bithumb Filing for IPO

Crypto derivatives exchange ByBit has launched a fiat onramp that will allow its users to trade more than 20 fiat currencies such as the US dollar, Euro, British Pound, and Canadian dollars for the cryptocurrency of their choice.

ByBit partnered with Banxa and XanPool to enable its users to purchase crypto with debit and credit cards and bank transfer. Early this year, Banxa also partnered with Binance to help the leading spot exchange to accept Australian dollars and Thai baht.

Fiat-crypto is a significant milestone for ByBit, which is a major coup for its traders as, before this, the platform has been using a separate onboarding service like Changelly or Coinbase to convert fiat currencies to digital assets before they could be deposited on the platform.

When it comes to bitcoin futures volume, ByBit ranks at 5th spot after OKEx, Huobi, Binance, and BitMEX, and it holds the same position in open interest on futures, as per Skew. The same goes for Ether futures, but it slips a spot below in terms of OI on futures with Deribit and FTX in the picture.

Since its launch in 2018, ByBit has been growing and continues to launch several products, including a range of perpetual swap contracts backed by stablecoin USDT.

It’s not just ByBit; exchanges in the crypto space continue to grow, the latest one being South Korea’s Bithumb, which is seeking an IPO in the country with Samsung Securities as the underwriter.

“It can be said that some part of the virtual currency has entered the system and has been the target for evaluating business feasibility and corporate value. It seems that the minimum environment for IPO of the virtual currency exchange is not equipped,” local media quoted an unnamed expert as saying.

Safeguard the Retail

Crypto exchanges in the space are growing and expanding, which is no surprise given that the market and adoption of digital currencies is growing.

Moreover, exchanges are lucrative businesses that make profits in extreme volatility, no matter the market goes up or down.

As per a Forbes report, the exchange revenue can range between $1.9 billion to $9.6 billion in 2029 based on the varying adoption rates. This is up from approximately $956 million in average trading fees in 2019 based on Kraken’s fee schedule.

As of mid-2019, 7% of crypto assets were held by institutional investors, as per Binance Research. This shows the growth is retail fueled which is further expected to increase in a bull market which crypto exchanges are poised to capture as we saw during the extreme volatility of March when these exchanges went on a hiring spree while the unemployment rate surged globally amidst the lockdown implemented in an attempt to slow down the coronavirus pandemic.

However, being a highly volatile, unregulated, and nascent space that offers more than 100x leverage, there is an increasing need for safety features, especially after the reports of the suicide of a 20-year-old Robinhood trader after he falsely believed that he was into $700,000-worth of debt by trading options.

Huobi added circuit breakers after the March crash, and Binance CEO Changpeng Zhao shared that they also have a “Responsible Trading” feature.

But Joel Edgerton, chief operating officer at the bitFlyer U.S., doesn’t think it’s enough as he said, “This is like a cigarette company saying smoke responsibly. If @binance actually cared about its customers, they wouldn’t sell 125X leverage. @cz_binance don’t shill your company on other people’s pain.”

We have a long way to go, and crypto exchanges need to act more responsibly.

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Author: AnTy