Derivatives Exchange BitMEX Hit with a Civil RICO Lawsuit From Bitcoin Manipulation Abatement


Crypto derivatives exchange BitMEX is facing yet another lawsuit.

Puerto Rican company BMA LLC formerly known as Bitcoin Manipulation Abatement is accusing the exchange of “deliberately designed, from the ground up” to facilitate “a myriad of illegal activities.”

This isn't the first time that BMA is suing a crypto company, as just two weeks ago they filed a lawsuit against Ripple and its CEO Brad Garlingouse for an alleged violation of US securities law in XRP token sale.

Before that, in November, they targeted BitMEX competitor FTX alleging them of price manipulation only to dismiss the case voluntarily a month later.

Now, BMA and Pavel Pogodin who control this little-known firm filed a suit in the US District Court for the Northern District of California alleging BitMEX’s parent company HDR Global Trading reaped billions in illegal profits via wire fraud, unlicensed money transmission, money laundering, and violations of the Racketeer Influenced and Corrupt Organizations Act or RICO.

The plaintiff accused the company of illegally processing $3 billion each day, “which is the record volume for such unlawful activity in the entire history of the monetary regulation in the United States.”

This has been in violation of US federal law on the grounds that BitMEX failed to acquire a money transmitter license, alleges BMA.

Also, about 15% of the $138 billion trading volume recorded by BitMEX in 2019 belongs to the traders located in the US.

BMA also alleges the derivatives exchange manipulated the crypto markets by boosting the Bitcoin price artificially.

The lawsuit further notes the extremely high trading leverage, 100x offered by BitMEX and claims the exchange uses the server freezes and “system overload” to accept and reject trading orders during volatile markets to cause price fluctuations and trigger maximum liquidations.

Plaintiff also took shots at BitMEX co-founder and CEO Arthur Hayes, calling him “cryptocurrency’s P.T. Barnum” who is a “promoter for the ‘degenerate gamblers' he solicits, and encourages speculative trading by (…) making bold predictions designed to elicit responses and move the market in a way that is profitable for BitMEX.”

HDR Global is aware of the complaint and will be defending itself against the “spurious claim.” An HDR spokesperson said,

“BMA has recently emerged as a serial filer of claims against companies operating in the cryptocurrency space, and is widely recognised for operating just like a patent troll.”

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