- 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.
2018 and 2019 were the BitMEX Era.
But is the BitMEX Era ending?
BitMEX has held over 50% of trusted spot + derivatives exchange volume for nearly 2 years.
But its share of total volume is dropping. pic.twitter.com/XleKvmOZGb
— Charles Edwards (@caprioleio) November 29, 2019
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.