Nick Chong · 7 days ago · 2 min read · Insights via Grayscale Investments
Bitcoin › BitMEX › Derivatives
Data shows no increase in Bitcoin withdrawals following BitMEX email leak
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Crypto derivatives exchange BitMEX hasn’t seen a major increase in withdrawals following the email leak it experienced last week. With 30,000 emails potentially compromised, the exchange prevented users from emptying their BitMEX balances by temporarily disabling Bitcoin withdrawals during the weekend.
BitMEX users seemingly unmoved by email leak
In what has now become the biggest data leak this year, BitMEX has revealed emails of around 30,000 of its users. The data, which was leaked in a routine email update, quickly began circulating on the dark web where malicious actors were trying to get ahold of the gold mine of emails.
With the danger of their funds being stolen, BitMEX users were expected to flee the compromised exchange, emptying their wallets and leaving the platform struggling with liquidity.
However, the latest data has shown that there has been no significant decrease in the balances on BitMEX throughout the weekend. Twitter crypto personality LightCrypto shared charts showing just how unaffected the exchange’s balances were in the wake of the email leak scandal.
According to the charts, BitMEX had a balance of 197,009 BTC on Oct. 31. After news about the leaked emails broke on Nov. 1, a massive increase in withdrawals was expected.
The data, however, told a different story. On Nov. 3, BitMEX had a balance of 194,474 BTC, which means that just over 2500 BTC were withdrawn from the platform.
Hackers aren’t the only ones who can benefit from leaked emails
Many crypto security experts and companies warned about the dangers of leaked emails. Envadr’s Kevin McSheehan said that emails could be cross-referenced with other public breaches and associated with universal passwords, enabling hackers to break into users’ exchange accounts. Crypto exchanges OKEx and Binance both called on their users to change their login information to secure their accounts.
While no major security breaches were reported as a result of the leak, it could take weeks or even months before we see the full scope of BitMEX’s security breach. In the meantime, the leaked emails could become the focus of the IRS.
Primitive Crypto’s Dovey Wan noted that the email addresses could be used to investigate taxes.
According to the recently passed IRS rules, crypto holders are expected to report their balances and then be taxed on capital gains and other forms of revenue they acquire through trading or holding coins.
The U.S. government could also use the email addresses to determine whether U.S. residents were active on the platform. BitMEX is not registered with the U.S. Commodity Futures Trading Commission (CFTC), which means U.S. residents are banned from accessing the platform.