What Sets BitMEX Apart in the Digital Asset Race

In Brief

Sam Sandiford, BitMEX’s Head of Product and Institutional Business Development, discusses the platform’s commitment to security, evolving product lineup, transparency, and digital asset trading trends.

Sam Sandiford, Head of Product and Institutional Business Development at BitMEX, brings over 17 years of experience in traditional finance to crypto derivatives. In this interview, Sam discusses his journey to BitMEX, the platform’s commitment to security, and what sets it apart for professional traders. He also shares his thoughts on BitMEX’s evolving product lineup, the importance of transparency, and the trends shaping the future of digital asset trading.

Can you please share your journey to Web3?

I joined BitMEX six and a half years ago after 17 years in traditional finance. I’d worked in derivatives for a long time, and BitMEX reached out to me to help work with their financial engineering designs, particularly around margining and perpetual swaps

It was a leap of faith at the time, and BitMEX has been a very interesting place to be over the last six and a half years, as I’m sure those reading this post will know. We’ve gradually increased the product range and are still a force to be reckoned with in the crypto markets.

BitMEX describes itself as a home for real traders. How does this manifest in your client experience and community-building efforts?

When we talk about real traders, we’re looking at what I like to call semi-professional traders and above. We’re not really a place for brand-new traders who haven’t traded before or who are new to crypto. We are a marketplace specializing in derivatives. How does that manifest itself in what we do with clients and the community?

We have an institutional team that covers our institutions directly with full white-glove service, and we have VIP coverage for our key retail traders. That can be done one-on-one with the retail sales team, as well as with groups and communities in our focus language areas. We particularly focus on Russian, Chinese, and English, and we have leads for each. In some of those, we even have separate marketing or copywriting teams that address and reach out to those user groups.

What specific UI customizations and advanced order types do your most active derivatives traders rely on?

If we’re being transparent, our most active traders will trade via our API. What API traders really want is speed and low latency, which we have – consistent latency, reliability, and the initial ease of setting up. The BitMEX API was one of the first robust APIs in crypto trading, so a lot of what we have is very similar to other venues already. It’s very easy for our users to connect to

Some parts are not perfect, which we’ve been addressing as priorities. For example, we worked on updating the readability and usability of our API documentation. We can now translate it – so from being a pure English-language API documentation, we will have Chinese and Russian very shortly, where we find the majority of our API traders.

The next set of customers are the whale traders, trading large sizes – not on a high-frequency algo level, but on a click trading basis. They value security and speed of execution, so they want liquidity, which we’re working on improving to attract even more of those users. They also look for security – BitMEX has never lost a single satoshi of customer funds

Whale traders want standardized market orders and tend to use regular limit and market orders. They don’t need that complexity and often do a lot of their executions via mobile devices rather than sitting at a screen.

The third set is the more OG traders. They’ve been trading for five, six years or more on venues like BitMEX and look for customization. They can add different components to their trading page, decide which trigger to use for take profits and stop loss, index, last price, or mark price. They can choose between a limit stop or a market stop. We have all this functionality in the background

We’re trying to make the base interface easier for new users by stripping that away so that when you land on BitMEX, it’s not confusing and you can start trading straight away. Then, through our retail sales team, KOLs, and community leaders, we make those other features discoverable to users after they’ve come in, so they can advance their trading experience if they want to.

The BMEX token offers trading fee discounts and VIP perks. What role does the token play in user engagement and loyalty?

We launched the BMEX token as a pure utility token around three or four years ago. It has mostly served for fee discounts and withdrawal discounts. So, it had some utility but not enormous traction. Right now, the BMEX token doesn’t play an enormous role in the community or our engagement, but that’s something we’re working on

Our next step is to expand the scope of our VIP program. You can already use BMEX to gain access to our VIP program, but at the moment, it’s PTS and withdrawal fee waivers or reductions. There will be an increased suite of VIP products in the pipeline, including white-glove service and invitations to special events, likely coming in Q3 this year.

You integrate trading bots natively. What safeguards and monitoring tools ensure user funds remain secure?

The first thing to say about having trading bots in-house is that it brings all the native security of BitMEX. We’ve never lost a single Satoshi. We check our system every five seconds to make sure no funds have gone missing. The base level—”Are my funds still in BitMEX?”—is taken care of just as if you’re a regular trader. The next bit is transparency. If I start a trading bot, can I see what trades are going on as soon as I turn it on?

The way our trading bots work is that you have a separate account or run the bots on a designated account, and you can see those positions in real time. You can take over at any time, stop the bot, and close out the positions yourself if you want to. So, there’s full transparency.

At the same time, should we ever have any operational issues, our customer funds are backed by a 37,000 Bitcoin insurance fund. We don’t expect that, but we monitor our trading bots for any bad behavior and test them before they go out

Should there ever be any issue with the bots, BitMEX can cover the losses that might be incurred. We are always monitoring the product suite, and we have a team that vets all trading bots before they go live, so we know what they’re supposed to do.

For your most frequent derivatives users, what competitive edge do you offer versus other platforms?

Safety and security are paramount to BitMEX. We’ve never lost any customer funds. It has slowed us down at times, but it’s a non-negotiable for us, not only in terms of custody, but also making sure the system itself doesn’t lose funds on one side of the trade. Leverage has been a key part of BitMEX’s growth. We offer up to 250x leverage. Other platforms offer similar leverage, but not in an environment as secure, one where we can guarantee profits for users on the other side.

We’ve got a backstop of a large insurance fund that’s been built up and managed over time. We set the leverage on specific contracts (not all of them at 250x or 100x), so we can be comfortable getting out of those positions should liquidations occur. When you use high leverage, liquidations definitely occur; it’s part of the process. We encourage users to use the leverage they are comfortable with. Some traders will trade enormous amounts with high leverage and are happy with the gains and losses, while newer traders, we suggest, should moderate their leverage.

Transparency is also important. You can see everything that’s going on in BitMEX. We have proof of reserves and liabilities to show our insurance fund and how we’ve got all our customers’ deposits under custody. Most importantly, we don’t trade against our customers. Other exchanges run in-house market makers or facilitate market makers trading against customers. We don’t do that. We’re truly a peer-to-peer exchange. That’s super important for our transparency and trading experience. We’ve been around for 10 years, so we’re battle-tested

We’ve had a few bumps along the way, but that just means we know how to deal with the obstacles when we’re faced with them. Our tech is sturdy and robust, making us one of the most reliable venues on the street.

Besides Russia and China, what new regions or markets are you targeting for expansion, given the global demand for derivatives?

We trade almost globally already and serve global markets, excluding the US and a handful of others. We want to grow traction in certain focus areas, and we think of focus areas more around language than specific geographies. When we think about licensing, geographies come into play as well. We’re working on our licensing posture, and we have a couple of jurisdictions where there might be interesting opportunities for us to get regulated effectively

We’re already more active in Asian geographies than Western ones. As licensing progresses, we see ourselves with increasing customer numbers, probably across the Middle East and West into Europe over the next 6 to 12 months. We’ve also grown our CIS team substantially in the last 3 months, so we expect more traction there as well. We’re open to business from CIS and Russian speakers.

As tokenization expands into real-world assets, how is BitMEX preparing to support or trade these new asset classes?

For us, RWAs probably start with stablecoins. We offer a small selection of stablecoins as margin currency at the moment and are continually looking to expand that. We added Ripple USD as a margin currency recently and are looking at other stablecoins – potentially yielding stablecoins and money market-based funds as future collateral. We’re not really a spot exchange; we’re a derivatives exchange, so our focus on RWAs is mostly around using them as collateral.

We have groups of clients earning 50% plus annually on trading who are not so worried about the yield from their collateral because they are collateral efficient and trade very frequently with small trading sizes. For them, this doesn’t matter. There is a group of customers we want to bring on who hold positions for longer and larger sizes – for them, margin efficiency is important. So, we’ll look for the most reliable collateral that can be converted into our currencies easily

Otherwise, someone on the exchange bears the slippage. If we want to get Bitcoin or Tether back from a money market fund token, we need to know that we can do it reliably, in size, and without too much slippage. Those are the avenues we’re exploring on RWAs. Outside of tokenization, we’re also exploring the use of securities through a partner, particularly T-bills, to be used as collateral, and then the partner will provide trading funds of Tether or other stablecoins on BitMEX

We will stay in touch with other RWA initiatives and consider listing those either as spot or as perps, where they are large and open enough to the universe of BitMEX traders. We probably won’t look at a token with very specific requirements, but we will look at a globally available token.

What macroeconomic or geopolitical forces do you believe will most significantly shape the crypto derivatives market over the next three to five years?

This is interesting. As markets are moving right now, we’ve had a dominant position, particularly in the centralized exchange space. BitMEX is registered in Seychelles, but most of our staff are based in Asia, and a lot of trading has been from this region. Price discovery, retail traders, institutional traders, and even trading data centers are based largely out of Asia, particularly Tokyo. So much so that we are moving our data center to Tokyo from Dublin in the next couple of months.

In the last six months, the U.S. has come out of its shell and will spark growth. The U.S. has three and a half years left of Trump’s presidency to really make its mark on domestic and global crypto markets. There’s a lot of tension in the middle of the globe, but it’s really an Asia versus U.S. balance

For exchanges that are neither U.S.-centric nor Asia-centric, there’s an opportunity to intermediate that flow. I think we’ll see consolidation in the U.S. to two or three venues, consolidation in Asia to three or four big venues, and then localized onshore exchanges, as we see in places like Korea with dominant exchanges like Upbit. Then a handful of players, and I see BitMEX in this space, will intermediate that flow

It’ll be very hard for an onshore trader in the U.S. to trade against a retail trader in China, for example, unless it’s in the centralized space. That flow will likely be intermediated by licensed venues outside of the U.S. and Asia. The geopolitical force driving that is probably the U.S. at the moment.

By 2030, what do you believe will be the defining feature of successful crypto trading platforms, and how is BitMEX aligning with that vision?

I think there are a few successful versions of a crypto trading platform. We move more towards the retail side, mass adoption, and trading on personal devices – trading on mobile rather than on desktop. That’s partly a generational thing. Many of our traders under 30 are much more mobile-focused, while those 35 and above are desktop traders, potentially former finance professionals. We see that shifting a lot

First, it’s easy access and simplicity, and with that probably comes passive trading. We talked about trading bots earlier, and copy trading definitely comes as a continuation to that. Maybe even access to asset management and own products will be the norm

The historic crypto traders haven’t really been as interested because they’ve been looking at 20%, 30%, 50% annualized yields rather than five, six, or seven. But with that comes a large risk appetite, which the average crypto adopter won’t have in three or four years’ time. They’ll have a lower risk appetite and be happy with lower yields. So, for starters, having strong mobile support would be a primary defining feature

In the institutional space, we’ll probably start to look a little bit like TradFi, at least from a tech angle – co-location, regulation, stability, and possibly dark pools for people to trade. There’s a slight difficulty with the way the crypto derivatives market is right now to make that work. At the moment, every contract on a different exchange, even if its underlying is very similar, is actually a separate instrument. There’s no direct fungibility across those instruments

Participants, including ourselves and traders, like it that way because they understand the differences, and that creates trading opportunities. Standardization and central clearing, which might be an idea that comes up, will have to change a bit. We might see more standardized contracts, at least on Bitcoin and ETH, so people can really be fungible

There will be resistance from a number of players because it basically eats into their margins. There’s a possibility that clearinghouses will be in place. It was tried seven or eight years ago and didn’t work, but maybe the market will decide in three years’ time if that’s necessary. That would certainly be easier to understand from a regulatory point of view.