BitMEX to close, but what about its $270M insurance fund?

BitMEX has announced it will shut down on September 23, following “a strategic review of the business and the broader crypto industry.”

The Arthur Hayes-founded exchange revealed earlier today that it was closing down, but didn’t expand on what exactly caused the closure. Users were encouraged to withdraw their funds and close any positions they may hold.

BitMEX stressed that assets are safe and remain in users’ control, and explained that it’s simply giving a timely warning to “ensure a smooth withdrawal process for everyone.”

At time of writing, the exchange holds over $739 million worth of customer assets, along with an insurance fund with $239 million worth of BTC and $31 million worth of USDT.

The exchange is the 35th most active crypto derivatives exchange and 65th largest crypto exchange overall.

The exchange’s BMEX token was also unstaked for every user, and has collapsed 97% across the last four hours. BMEX was already down 99.87% from its 2022 all-time high.

BitMEX’s shuttering coincides with a crypto bear market that’s seen multiple crypto firms lay off staff. Since January 2026, the company’s trading volume has only crossed $1 million 14 times.

Dear BitMEX Users,

Today, we share with a very heavy heart that BitMEX exchange will shut down its operations, effective 23 September 2026 at 04:00:00 UTC.

The owner and operator of BitMEX, HDR Global Trading Limited, has made the difficult decision to close operations… pic.twitter.com/oWuqlh547f

— BitMEX (@BitMEX) July 23, 2026

Going forward, no new BitMEX accounts can be created, with all services due to be closed in September (except withdrawals). Accounts with funds remaining will be charged monthly at “USD50 equivalent or 1% per annum (whichever is greater).”

BitMEX hasn’t commented on plans for its $270 million insurance fund after September 23. Protos reached out to BitMEX regarding its plans for its insurance fund but did not receive a response prior to publication time.

The insurance fund has grown over time, mostly due to BitMEX profits from trading fees and liquidations. Although some people have called it ‘one of the best performing funds of all time,’ its outperformance partially came at the expense of exchange-affiliated marketmakers trading against BitMEX customers.

BitMEX warned that winding down a company can allow criminals to take advantage of uncertainty. “Be vigilant for phishing attempts using this news, or promising priority or accelerated withdrawals – no such expedited service is available,” it told users.

It added, “While this news is difficult to share, we are proud of everything that has been built at the company since its launch as a pioneer of crypto derivatives.”

BitMEX was bad at stopping money laundering

BitMEX was founded in 2014 by Arthur Hayes, Ben Delo, and Samuel Reed. Together they created the 100x leverage perpetual swap, which BitMEX claimed at one point to have been “the most traded product in the crypto industry.” The holding company of BitMEX has been 100x Group, named after that product.

In February 2022, Hayes and Delo pled guilty to breaking the Bank Secrecy Act and violating anti-money laundering (AML) laws. Reed pled guilty one month later to similar charges.

For a time under their stewardship, the exchange had limited KYC or AML checks. This resulted in a Department of Justice enforcement action for compliance failures.

BitMEX invested heavily in US lobbying before its pardon

All three were fined $10 million each, and the exchange was later fined $100 million. However, months after that fine, President Donald Trump pardoned the founders.

Delo has since gone on to fund right-wing political hubs used by some of the UK’s most influential right-wing figures, and backs Reform UK, Nigel Farage’s party that is currently embroiled in a growing crypto “gifts” scandal.

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