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Hot Development: Lawsuit Filed on Giant Bitcoin Exchange in the USA

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Hot Development: Lawsuit Filed on Giant Bitcoin Exchange in the USA

On Saturday, the US Northern California District Court sued institutions and individuals associated with the Seychelles-based cryptocurrency exchange. That is, the stock market’s parent company HDR Global Trading Limited and its founding partners Arthur Hayes, Ben Delo and Samuel Reed were sued.

Claims about BitMEX

Plaintiff; BMA LLC accuses BitMEX and its operators of facilitating numerous illegal activities, including fraudulent business transactions, bank fraud, money laundering, illegal donations, and market manipulation.

The claimant also claimed that BitMEX illegally offered high-risk trading services to US citizens. In a court application, it was announced that the stock exchange almost 15 percent of the transaction volume in 2019 came from the US regions. This means that BitMEX has made approximately $ 138 billion in transactions in the U.S. without a money transfer license.

In the case, it was argued that “therefore, the business that transfers unlicensed money accepts an average of 3 billion dollars of illegal money transfers every day.”

Over-leveraged transactions, insider trading

BMA also stressed that BitMEX allows traders to bet up to 100 times their original capital. The plaintiff wrote that the “buy from two or three illiquid exchanges” prices on the stock exchange and use the “BXBT index price for highly liquid derivatives”.

This “fake” system causes manipulators and money launderers to be perceived. You can open an unlimited account without any withdrawal or deposit limits. Unlimited access confronts the BitMEX system with “overloads”, where the system accepts some orders and rejects others during wider market movements. BMA explains its claim as follows:

“LIQUIDATIONS MAKE BITMEX THE PERFECT TOOL FOR BAD ACTORS TO MANIPULATE THE CRYPTOCURRENCY MARKETS.”

This accusation reminded BitMEX to adopt insider trading in April 2018. Such trades often caused huge losses, resulting in an unfair trade compared to small retail traders.

BitMEX lost half its market share in the past six months. Bitcoin price dropped more than 50 percent overnight as a result of the withdrawal of large amounts of cryptocurrencies after a “technical issue” on the stock market on March 12 .

On March 12, BTC had dropped in BitMEX. Source: TradingView

The stock market also faces its first investors in a separate case of $ 540 million. The plaintiffs accused the stock market and its CEO, Hayes, of deceiving themselves by offering shares in the company.

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