FTX Slapped with $150 Million Lawsuit For Market Manipulation, Selling Unlicensed Securities In The US
Derivatives crypto exchange FTX has been slapped with a $150 million lawsuit being accused of manipulation as well as selling unlicensed securities in the US, Cointelegraph reports.
The lawsuit was filed in United States District Court for the Northern District of California by a little known plaintiff Bitcoin Manipulation Abatement LLC. Some of the charges that the exchange has been accused of include crypto price manipulation as well as unfair business practices.
The lawsuit is recommending charges against FTX Trading Ltd, Alameda Research Ltd as well the founding members of FTX.
The plaintiff claims that it has watertight evidence that FTX attempted to attack the recently released Binance Futures in efforts to manipulate the prices of Bitcoin futures in the platform. FTX is accused of dumping futures agreements of about 255 BTC with the aim of creating an artificial price movement that would lead to the execution of stop-loss orders as well as liquidation of futures long positions.
The lawsuit was revealed by Samuel McCulloch on twitter where he posted some parts of the lawsuit papers.
— Samuel McCulloch (@traders_insight) November 3, 2019
As per the lawsuit documents, Binance was able to resist the attack since the value of BTC is arrived at through a given index which means that the platform is able to secure the king coin from minor attack attempts that could have a ripple effect in the market.
McCulloch summarized the lawsuit stating that FTX is being accused of utilizing its market advantage to tilt BTC prices utilizing ignition algos whose end game was to come up with a liquidation cascade.
Following the accusations, Alameida Research, whose CEO doubles up as FTX’s CEO, and is also one of the defendants, explained that the lawsuit was laughable as it was full of inaccuracies. In a blog post, the company termed the lawsuit as a nuisance that does not even comprehend how the entire business operates.
The firm explained that the lawsuit was part of a smear campaign due to its recent popularity and growth in the crypto sphere.