- Peer-to-peer crypto contract trading platform BitMEX says it has notional daily trading volume of more than $US1 billion on its platform.
- CEO Arthur Hayes told BI he “absolutely” has interest from venture capitalists but he is not interested.
- “The mining firms, the trading platforms – they don’t need VC money,” he said.
LONDON – The CEO and founder of a Hong Kong-based bitcoin platform says he has no interest in taking an venture capital investment, despite interest from funds.
Arthur Hayes, the founder of BitMEX, a peer-to-peer platform for trading cryptocurrency derivatives, told Business Insider he has “absolutely” had interest from VC funds looking to invest.
BitMEX lets people trade cryptocurrency derivative contracts such as futures with other investors. Founded in 2014, the company is registered in the Seychelles but has operations in Hong Kong and the US.
BitMEX offers leverage of up to 100x on its bitcoin futures products and Hayes says billions of dollars worth of cryptocurrency are being traded on the platform every day.
“In December of last year, we did $US2 billion of notional trading per day on our platform,” said Hayes, a Wharton graduate who worked for Deutsche Bank in Hong Kong before setting up BitMEX. “It’s down a bit in January but we’re still in the $US1 billion+ notional traded per day.”
BitMEX only accepts bitcoin as collateral and charges a fee of 0.05% for trades placed on its platform and Hayes confirmed that BitMEX charges fees on the notional values traded, suggesting revenues of at least $US500,000 per day.
“We’re doing OK,” Hayes said when asked how much BitMEX is making. “We’re not doing as well as some of the other exchanges that charge higher fees but its definitely a profitable business.”
The huge volume, the bulk of which comes from North Asia, has understandably attracted attention from investors.
“When we need the VCs the most they didn’t want to be associated with bitcoin or cryptocurrencies,” Hayes told BI. “Now that all of these platforms are making all of this money, all the VCs all of a sudden need to have a bitcoin or crypto strategy.”
BitMEX was funded by “a very small amount of friends and family money via some convertible note structures,” Hayes said, and he has no desire to take any outside investment.
“Unless there are some strategic reasons to do so [take outside money], most of what I see is a bunch of people who have money but have no other thing to add but some money,” he told Business Insider. “If you don’t need money, then you really have no value as an investor. You just create more work and you have more people that are annoying you.”
“The mining firms, the trading platforms – they don’t need VC money. They’re perfectly capable of funding capex and opex from retained earnings.”
The company is registered in the Seychelles to take advantage of the lax regulatory environment.
“They don’t have very many restrictions on what you can do, as long as you don’t offer your products to the local citizens,” Hayes said.
“If you look around a lot of online FX trading houses are located in the Seychelles. And then obviously, strong corporate secrecy and no corporate tax. There’s a lot of benefits. And English common law – so proper, internationally recognised, codified contract law,” he added.
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