The following guest post is written by Peter Wilkinson, CEO of the cryptocurrency exchange BitMEX.
My name is Peter Wilkinson, the current CEO of BitMEX. I came to BitMEX from the traditional finance sector, where I worked as an in-house lawyer for an insurance company. I received an intriguing call from a recruiter saying that BitMEX urgently needed lawyers. During the first interview, I was asked how soon I could start and whether they could buy out my notice period from my previous position. I immediately understood that this was not an ordinary company.
At that time, I had only a superficial understanding of cryptocurrencies. A quick search brought up a lot of material in Bloomberg, the Wall Street Journal, and other publications—much of it was about Arthur Hayes. The company intended to radically change traditional financial approaches to exchange operations by introducing instant settlements, 24/7 trading, and a risk structure that eliminated the need to return funds to a margin lender. Particularly notable were Arthur Hayes's activity on social media X (formerly Twitter) and BitMEX's bold marketing initiatives—for example, displaying a "Lamborghini" at the entrance to the Consensus 2018 conference center in New York. Again, this was completely unlike anything I had encountered in the conservative world of traditional finance (TradFi).
Despite the bright hype and the aura of "revolutionaries" surrounding the company, from the very first day I was struck by how seriously and purposefully all BitMEX employees approached their work. It was clear that people were genuinely passionate about the cause and eager to develop it. It sounds cliché, but it felt like for them it was more than just a job; they were true evangelists.
Coming from the traditional finance world, I was accustomed to that dose of apathy that went hand in hand with seriousness; perhaps this was inevitable given that everything was strictly regulated. At BitMEX, however, there was no such apathy, and the seriousness stemmed from the desire to create the best possible product; the commitment of each individual was truly striking. Honestly, I expected a slightly more relaxed atmosphere, given the common perception of cryptocurrencies as a sphere run by "kids," but I couldn't have been more wrong.
Before I knew it, I was sitting in the Hong Kong office, admiring the sharks gracefully gliding in their aquarium, a fully stocked on-site bar, poker and mahjong rooms, and wondering how I got there. While it was somewhat overwhelming, upon closer inspection I saw how solidly built this company was. Alongside the typical millennial pomp, there were sleek gray lines and a ticker tape of cryptocurrency quotes running across the ceiling throughout the premises—it resembled a well-oiled hedge fund more than a cryptocurrency company.
However, not everything was about "sharks" and revolutionary finance; soon after my arrival, in 2020, the now well-known US legal proceedings against the founders and the company itself took place. This was the first major lawsuit against an exchange in the industry, and it happened at the worst possible time. We had just implemented a full KYC procedure and became the first exchange outside the US to do so; this was already putting a strain on the business. The initiative came from the founders, as it was the right step for the company's future, which would have to operate under various licensing regimes. The process was already underway when the US charges came.
The implementation of KYC led to many of our core users migrating to other platforms where KYC was not yet required. When the charges were filed, many of our clients panicked and rushed to withdraw their funds—many of them never returned. There were fears that US authorities would freeze the BitMEX platform and block client funds. If that had happened, it would have been outrageous (and illegal), but at the time there was real panic, as it was unclear what measures the US government would take against the company or the entire industry.
We were just beginning to introduce Bitcoin-based products, such as ISDA monthly credit swaps for institutional clients, but these plans fizzled out after the charges were filed. On top of this, fierce competition was already beginning—companies were copying BitMEX's products and poaching our users. Not to mention that this coincided with the departure of the founders from active roles in the business, resulting in management transferring to a new team of executives with traditional finance experience who did not have the same industry influence as the founders and couldn't help drive the business forward.
Even after this devastating blow, I felt—and still feel—that BitMEX was truly special. Thanks to the people, the corporate culture, and our users (especially those who actively participate in Trollbox!), we created something to be proud of. For example, we have many dedicated employees who have been with us for over five years. In the cryptocurrency industry, that's an eternity, and it speaks volumes about the company culture, where everyone contributes, guided by the principle of "business above all" and striving for excellence.
Looking back, this dedication may have slowed down the launch of our products, as we often aimed for perfection rather than quick implementation, but it shows that our employees take great pride in what they do. We never had strict service level agreements (SLAs) for employees, where failure to meet them would automatically trigger a warning letter from HR—as can be seen at some competing exchanges—and I'm glad we didn't, as it created a much more collegial and transparent work culture.
And, as I mentioned, Trollbox is simply brilliant: it's a place where our users can chat, express dissatisfaction, and complain (or, in extreme cases, even get banned!). This fostered a real sense of community among our users, in addition to what we had with the employees.
They say that all good things must come to an end. This may or may not be true, but in the end, for BitMEX, it turned out to be true. We didn't keep pace with our competitors. We were so focused on our derivatives niche that we failed to look up and see that our users wanted a single platform for spot trading, earning yield, storing assets, and trading derivatives, especially with stablecoins like $USDT. We joined the "$USDT party" at the end of 2021, but by then we were already losing market share.
I've also encountered many commentators who note that although BitMEX invented the perpetual swap, we never perfected it or engaged in head-on competition. Although I'm not a fan of self-proclaimed experts on social media (and, as Homer says, after the event, even a fool becomes wise), there is some truth in this statement. Ultimately, there wasn't a single reason that led BitMEX to today's platform closure. I've already touched on some key points above, but business obeys Darwin's laws, and not everyone is destined to exist forever.
I am immensely proud of what BitMEX and our team have achieved. Above all, we have consistently protected all client funds. We are the only exchange that, throughout its entire history of over 11 years, has not lost a single penny due to hacks. This is a testament to the fantastic work done by everyone—both in the past and present—and I hope people will remember this as something commendable.
Finally, we played a key role in supporting the founders' vision related to the perpetual swap, which today is the most traded financial instrument in the cryptocurrency industry. Imitation is the sincerest form of flattery: the perpetual swap is now available from every player in the cryptocurrency exchange market and is the engine of cryptocurrency leverage. Perhaps in the future BitMEX will not be part of the cryptocurrency landscape, but if you look around, without it the landscape wouldn't look the way it does now, and it's a great honor for me to have had the opportunity to watch it all from the front row.
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