Arthur Hayes, CEO and
founder of BitMEX.
BitMEX

  • Peer-to-peer crypto contract trading platform BitMEX
    says it has notional daily trading volume of more than $1
    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 $2 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 $1 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 $500,000 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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