Just over a month ago, crypto-asset exchange BitMEX announced that it was “revamping” its BMEX token, on April 1, 2025. April Fools’ Day notwithstanding, BitMEX’s announcement reflected a serious move that tweaked several BMEX parameters, with the clear intention of pushing the token price up.

BMEX is a standard “exchange token” in the sense that the utility for holders of the token – and it is genuine utility – is reduced fees when transacting on BitMEX. To the extent BitMEX is a useful trading platform that is clearly of some value.

At the time this report was prepared on April 8, 2025, the publicly reported market cap for the BMEX token was around US$25 million, which did not look obviously wrong.

However, the reported circulating supply was incorrect, and therefore the “real” market cap for BMEX was closer to US$100 million, and an outsized quantum of BMEX tokens sits inside unlocked vesting contracts that the team can dump at will.

This case study will examine the BMEX token allocation, identify the hidden pockets of BMEX token liquidity, and point traders to the addresses that need to be monitored, in order to manage potential selling pressure.

Problems start from the fact that the BMEX token was not distributed as described by the BitMEX team. Nearly all of BMEX’s circulating supply has been held back and this is not properly reflected in BitMEX’s own BMEX research published contemporaneously with their recent announcement.

Potential issues of misrepresentation aside, it is an interesting choice by the BitMEX team, especially given the exchange’s founders were pardoned just days before the BMEX announcement.

Perhaps somewhat ironically as well, the U.S. Securities and Exchange Commission was in the process of preparing guidance concerning disclosure and transparency requirements with respect to token issues such as those contemplated here.

All of this strongly suggests there is a high likelihood that “hidden” BMEX supply may soon be unleashed on the market, potentially putting downward pressure on price.

The key features of the BMEX token are:

1. 450 million total BMEX token supply with a vesting schedule.
2. Staking and fee reduction features on BitMEX.
3. Periodic burning of BMEX by BitMEX in proportion to fees collected by the exchange.

BMEX’s staking and fee reduction features are generally uncontroversial, and their track record of burning BMEX tokens based on the exchange’s fees appear to be in line with their stated procedures.

In Figure 2. we can see that 11.5 million BMEX tokens have been burned.

Instead, it is far more common for a large number of wallet addresses, controlled or associated with a handful of collaborators, to be sending tokens in each of those many wallets to exchanges.

Where issues become apparent is with respect to the supply of BMEX, as is clear from the BMEX vesting contract (accurate at time this case study was prepared).

As we can see from Figure 3., out of a total supply of 450 million BMEX tokens, 350 million sit inside the vesting contract. With 11.5 million BMEX tokens burned, this puts the actual circulating supply of tokens at 88.5 million.

The BitMEX Litepaper places numbers to the purported circulating supply.

Depending on how one accounts for the burning of BMEX tokens, that still leaves a gap of 261.5 million:

The vesting contract explicitly provides addresses for the “ecosystemFund”, “longTermLockUp”, “team”, and “treasury”, yet none of these addresses has ever received a BMEX token.

If BitMEX were serious about these vesting procedures, they would have simply transferred BMEX tokens into these addresses. That they did not do so, clearly raises the risk the BitMEX team plans to dump their tokens quicky.

The owner of the vesting contract is an EOA that has never been used either, which does not instill confidence in the strength of governance procedures – the EOA can unlock and have these tokens dumped at any time.

We can query the vesting contract to see if these designated addresses are eligible to claim BMEX tokens at any time.

For example, the “ecosystemFund” address is eligible to claim its full allocation of 135000000000000 / 10⁶ BMEX tokens (BMEX tokens have up to 6 decimal places), or 135 million tokens, as shown in the screenshot in Figure 4.

For all intents and purposes, the vesting contract functions as stated. However, the operators of the various addresses specified in the vesting contract never retrieved, even if only to “re-lock” most of their entitled BMEX tokens.

At the time this case study had been prepared, only one claim of 63.75 million BMEX tokens by the “treasury” address was ever made, which were shortly deposited into BitMEX.

Through 2026, a further 53 million more BMEX tokens will become available for claim by the “treasury” address, at which point all the BMEX tokens will be unlocked, at least with respect to the vesting contract.

The stated circulating supply of BMEX tokens of approximately 100 million, as promulgated by major token websites, is off by a factor of nearly four.

There are 261.5 million BMEX tokens available, unlocked, and sitting in the BMEX vesting contract now, a gap which is entirely under the control of the BitMEX team who were recently pardoned.

It is interesting to note as well that this practice is vaguely reminiscent of failed crypto-asset exchange FTX’s habit of leaving their FTT tokens unlocked in vesting contracts for extended periods of time.

None of this implies BitMEX is doing anything remotely similar to FTX, but from an optics perspective is perhaps not the best indicator of good husbandry for an exchange.

The threat of BMEX tokens being unleashed by the team notwithstanding, it is noteworthy that despite claims to the contrary, BMEX is both available, and traded in the United States, increasing the risk of potential enforcement issues.

Between December 2024 and February 2025, the address that collects fees from a Coinbase wallet product received just over 3 BMEX across 3 transactions.

Given the BitMEX team was pardoned just days before the recent announcement, there is a non-zero chance the relevant authorities may not take lightly to these moves, and any threat or even a discussion of a threat of enforcement may have a negative impact on BMEX price.