BitMEX Crypto Exchange Reports Insurance Fund Of $75 Million
The representatives of the BitMEX trading platform decided to tell on the blog about the presence of a large insurance fund in the amount of 21,000 bitcoins (about $75 million). The main reason for its existence is the support of the margin trading model that is offered to the customers.
The crypto exchange explains the principles of operation of such a model and speaks of contemporary challenges that arise outside the traditional financial and monetary system. The platform mechanism closes liquidated positions of users automatically, but the exchange buys these positions before closing and increases the assets of the fund at their expense.
The attention to the funds of the exchange was attracted by Zack Voell, the expert of the Messari firm. He noted that the funds increased in 2018, despite the fall in the bitcoin value. Moreover, their increase coincided with the emergence of new bitcoins.
The CryptoCompare analysts provided data that most financial products, including perpetual derivatives and futures, belong to BitMEX, the platform is ahead of the CBOE and CME stock exchanges by this number.
Regulated stock exchanges are protected at a high level, including by state institutions. BitMEX does not have such opportunities, therefore, in search of various options, it began to redeem positions lost by customers. Thanks to this mechanism, the platform pays funds to the winning traders and increases the insurance fund.
As previously reported, the BitMEX crypto exchange will stop servicing users' accounts from the United States and Quebec in Canada.