Crypto Derivatives Exchange Sued For $300M By Investor; BitMEX Valuation Drops By 72% In 18 Months

    • BitMEX is sued for allegedly cheating an early investor
    • Exchange valued at just $1 billion, down from 2018’s estimated $3.6 billion
    • BitMEX era ending? Exchange seeing declining volume ever since June 2019

    Popular cryptocurrency derivatives exchange BitMEX and its co-founder Arthur Hayes who was formerly a derivatives trader at Citigroup and Deutsche Bank has been sued for $300 million for allegedly cheating an early investor.

    Frank Amato and RGB Coin Ltd. claim to be the first seed investor in the exchange in 2015. The $30,000 investment made by them was supposed to be later converted into equity, that currently values at over $50 million. However, they weren’t granted the equity and Amato claims the Seychelles-based exchange gave him false information.

    Now, with this suit Amato, former JPMorgan commodity derivatives trader and RGB Coin are looking to recoup the value of their equity plus $250 million in punitive damages.

    BitMEX valued at just $1 Billion

    The Bloomberg report further states that BitMEX is now valued at about $1 billion based on the estimated value of the stake.

    Back in July 2018, The Times reported the exchange’s valuation at $3.6 billion based on its annual earnings.

    In 2018, despite bitcoin losing 84% of its value, BitMEX recorded significant volume. During the crypto winter last year BitMEX crushed the industry's record for the number of BTC traded by surpassing 1 million BTC on the platform over a 24-hour period on July 25.

    Even in December, when BTC bottomed at $3,200, the futures trading volume on BitMEX increased 17.7% in December, according to CryptoCompare.

    Low Volumes to Blame?

    During the first half of 2019, the daily volume on BitMEX exceeded $11 billion as demand for crypto assets shot up after Bitcoin hit 2019 high at $13,900.

    However, since then, it has been decreasing. In October, perpetual contract volumes declined 44% since June and a 23% drop in open interest from the previous month was also recorded. The downtrend is intact till now.

    Recently, London-based tracker TokenAnalyst co-founder Sid Shekhar called the exchange “the biggest casino ever” that rakes in about $700,000 in fees on a daily basis.

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    AnTy has been involved in the crypto space full-time for over a year now. Before his blockchain beginnings, he worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

    [Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

    [Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer



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