BitMEX To Shut Down 11 Years After Inventing the Perpetual Swap

The board of HDR Global Trading, the Seychelles-incorporated company that owns and operates the platform, took the decision after what the exchange described in a blog post as a strategic review of its business and the wider crypto industry. The closure comes four months after President Donald Trump pardoned both the company and its founders, wiping off a $100mn criminal fine, and three weeks after its chief executive, chief financial officer and growth chief all left at once while the business was reported to be seeking a buyer.

The exchange said the decision "comes with a heavy heart for all of us at the company and has not been taken lightly."

What happens to users, and when

The platform trades normally until 26 Aug at 04:00UTC. From that point, BitMEX applies reduce-only limits, meaning traders can shrink existing positions but cannot open new ones. Between then and the closing time, the exchange will close positions to wind the market down in an orderly way, and anything still open at 04:00UTC on 23 Sept will be closed immediately.

BitMEX has warned it takes no responsibility for trading losses caused by users being unable to close positions in the meantime, and says it may force closure at its sole discretion. Contracts with thin liquidity will be settled early.

All staked BMEX tokens, the exchange's own token, have been unstaked and returned to holder accounts. Staking locks a token up for a period in return for rewards, so unstaking early is a signal that the company does not expect the programme to outlive the platform.

Users can still log in after the closing date to see balances and withdraw. Those who leave assets behind face a charge: KYC-verified customers who have not withdrawn by the closing time will pay $50 or 1% a year, whichever is greater, billed monthly, and BitMEX says that fee may rise later with notice. KYC, or know your customer, is the identity-verification process regulated financial firms are required to run.

BitMEX told users to be "vigilant for phishing attempts", and said no expedited withdrawal service exists. It expects delays, partly because Bitcoin block confirmations can take up to an hour and the exchange works from a fixed pool of withdrawal addresses. It says all assets exceed liabilities, pointing to its published proof of reserves and liabilities, a cryptographic disclosure exchanges use to show customer assets are actually held rather than lent out.

The exchange that built the perp

BitMEX started in 2014, founded by Arthur Hayes, a former Deutsche Bank and Citigroup equity derivatives trader, alongside Ben Delo, an Oxford-educated programmer who had worked at JPMorgan, and Samuel Reed, a software engineer.

Its lasting contribution was the perpetual swap. A conventional futures contract has an expiry date, forcing traders to close or roll positions. BitMEX stripped the expiry out and used a periodic funding payment between long and short holders to keep the contract tracking the spot price. The result was a derivative that could be held indefinitely, with leverage that reached 100 times a trader's deposit.

That combination made BitMEX the venue where crypto price discovery happened for several years. It also made it notorious. High leverage means small adverse moves trigger liquidation, where the exchange closes a position automatically to stop losses exceeding collateral. Cascading liquidations on BitMEX repeatedly amplified moves across the whole market.

Most major venue now runs the product. Global perpetual futures volume reached $61.7tn in 2025, up 29% year-on-year, according to market data provider CryptoQuant, figures that surfaced in CME Group's lawsuit against the US Commodity Futures Trading Commission over the regulator's approval of onshore crypto perpetuals for Kalshi and Coinbase. The contract BitMEX designed to sit beyond the reach of US regulators is now being licensed by them.

From market leader to also-ran

The decline was long and had numerous causes.

In March 2020, as Bitcoin fell by roughly half in two days, BitMEX's trading engine went offline during the worst of it. Liquidations stopped, and traders who could not reach their positions concluded the venue could not be relied on in exactly the conditions it existed for.

Bitcoin held on the platform dropped sharply in the following weeks.

The 2020 indictment accelerated an exodus that was already under way. Binance, Bybit and OKX took share with deeper spot books, more listings and, eventually, better regional compliance. BitMEX kept its reputation for security, and its claim of zero funds lost to hacks across 11 years is genuinely unusual in an industry where nine-figure exchange breaches happen frequently. Security was not the problem. Relevance was.

At its peak the exchange occupied space in Hong Kong's Cheung Kong Center at a reported $600,000 a month, among the most expensive offices anywhere, a symbol of an era when it set the price of Bitcoin for the whole market.

By 2026, the platform had been reduced to competing on breadth rather than depth, listing TradFi perpetuals on equities, commodities and foreign exchange. Later, it found itself joining the scramble to offer synthetic exposure to the SpaceX listing alongside Binance, Coinbase International and Hyperliquid, as reported in June. Recent months brought steady delistings: 21 derivatives contracts on 2 Jul, nine spot pairs on 16 Jul.

The charges, the plea, the pardon

In 2020, the US Department of Justice indicted Hayes, Delo, Reed and the exchange's first employee, Gregory Dwyer, under the Bank Secrecy Act, the US law requiring financial institutions to verify customers and report suspicious activity. The CFTC brought parallel civil charges.

Prosecutors said the platform was in effect a money laundering platform, and pointed to marketing that advertised no real name or advanced verification was required. Court records cited an internal email from 2015 describing the absence of onerous KYC requirements as an advantage. Reed was told in 2018 of allegations the exchange was being used to launder proceeds of a crypto hack, and no suspicious activity report was filed.

BitMEX settled with the CFTC and the Financial Crimes Enforcement Network for $100mn in 2021. The four executives pleaded guilty during 2022, paying $10mn each and receiving probation, with Hayes serving six months of home detention. The company itself pleaded guilty in 2024 and was criminally fined a further $100mn in January 2025.

That fine was never paid. On 27 Mar 2025, the week it fell due, Trump pardoned all four men and HDR Global Trading itself. It was among the first corporate pardons in modern US history, and Bloomberg reported this week that HDR is now one of nine companies pardoned in Trump's second term.

Two months before the pardon, in January 2025, BitMEX listed a swap tied to the $TRUMP memecoin.

Delo called the prosecution wrongful and said he was grateful to the president. The pardon removed the last legal obstacle to selling or winding up the business cleanly.

For context on where that sits in Washington's hierarchy, the Senate agreed on 15 Jul that Sam Bankman-Fried should receive no clemency. Not one senator present in the chamber at the time objected to a resolution treating the FTX founder as different from the crypto figures already pardoned, among them Hayes, Delo, Binance's Changpeng Zhao and Silk Road's Ross Ulbricht.

Where the three founders ended up

None of them will be much affected by the closure. Hayes stepped back from management in 2020 and spent the following years running what he called his family office, Maelstrom, and writing macro essays published on BitMEX's own blog, the most recent in June. He remains one of crypto's most widely read commentators.

Delo has taken the most public turn. Pardoned in March 2025, he donated £4mn to Reform UK in the first quarter of 2026 and said in April he was moving to the UK from Hong Kong, citing the £100,000 cap on donations from overseas electors. New residency rules could catch him and other overseas crypto backers, requiring donors to live in the UK for a full calendar year before the cap lifts, applied retrospectively from 26 Mar 2026. Delo did not respond to a request for comment on that story.

Reed has kept the lowest profile of the three.

The current management team is not the founding one. Peter Wilkinson, previously global general counsel and chief operating officer, became chief executive at the end of June after Stephan Lutz resigned, finance chief Ina Steiner and growth chief Raphael Polansky departed. Consolidating three senior roles into one was read at the time as cost control ahead of a sale. On the evidence of today, no buyer materialized.

Who stands to gain from the closure

The immediate beneficiaries are the venues that already took BitMEX's share. Binance, Bybit, OKX and Hyperliquid inherit whatever open interest and active traders remain, and the concentration of perpetuals volume among a handful of offshore platforms tightens further.

The more interesting winners are onshore. The CFTC approved Kalshi's Bitcoin perpetual in May and let other designated contract markets self-certify similar products, with Kalshi self-certifying more than a dozen crypto perpetuals and generating over $1bn of trades inside a week. Coinbase was cleared for offshore equivalents. CME, which has listed Bitcoin futures since 2017, is suing to have perpetuals classified as swaps and subjected to stricter capital and margin rules.

BitMEX's exit removes the industry's clearest living argument that perpetuals belong offshore and unregulated. The product's originator is closing in the same season US regulators started licensing it domestically, which strengthens the case that the contract can be brought inside the regulatory perimeter without the market breaking.

Who is left carrying the losses

BMEX holders have taken the clearest hit. The exchange's token traded around $0.058 before the announcement, collapsed to $0.001099 in the minutes after BitMEX published at 07:40UTC, then recovered to $0.014852 by 08:45UTC, close to ten times its low. That left it down roughly 82% on the day. Exchange tokens derive value from fee discounts and platform benefits, and those disappear with the platform. The unstaking of every staked token removes any remaining lock-up and lets holders sell into the move.

Traders with open positions carry timing risk. Anyone holding an illiquid contract faces early settlement, and anyone still positioned after 26 Aug can only reduce it. In thinning liquidity, exit prices are likely to be worse than screen prices suggest.

Users who ignore the deadline face an indefinite and explicitly increasable fee on stranded balances. The greater-of formulation means small accounts are hit hardest in percentage terms: a $600 balance pays the $50 monthly minimum, which consumes it inside a year.

Employees are the least visible group. BitMEX employed about 300 people globally in early 2022, cut a quarter of them that April after a deal to buy a German bank collapsed, and was down to roughly 180 by that September before cutting again in November. Its own LinkedIn page now gives a self-reported range of 51 to 200. The company has published no headcount or redundancy details for the closure.

BitMEX's obituary

The verdict on BitMEX is not that it failed technically. It ran for 11 years without losing customer funds to a hack, which most of its larger rivals cannot claim, and it built the single most-traded product in crypto.

What it could not survive was the decision, taken early and defended for years, to treat identity checks as a feature to be avoided rather than a cost of doing business. That choice won it the early market and then cost it the US, its executives' liberty, its market share and, in the end, the business itself. The pardon arrived in time to clear the balance sheet, but not in time to restore the franchise.

The perpetual swap will outlive its inventor by some distance. It is a $61.7tn-a-year product now, moving from the regulatory shadows onto licensed US venues, and the exchange that designed it will not be trading when that transition completes.

Sandmark approached BitMEX for further details surrounding the closure and is yet to receive a reply.