Judge Dismisses Racketeering and Market Manipulation Case Against BitMEX


Cryptocurrency derivatives exchange and trading platform BitMEX has scored a significant win in a racketeering and market manipulation case following a ruling from a federal judge.

Earlier this week, Judge William Orrick of the United States District Court for the Northern District of California dismissed claims from traders against the company.

Too Many Words in the Claims

According to a report from Law360, Judge Orrick pointed out that many of the allegations levied against BitMEX and its parent company, HDR Global Trading, had been copied and pasted from several other complaints against them.

A group of investors brought the amended lawsuit in question against BitMEX and HDR after Judge Orrick dismissed the first one because it was “excessively wordy.” The initial case had been 237 pages long, with up to 600 paragraphs of complaints levied against both firms. Still, the second suit measures 378 pages and had over a thousand paragraphs.

As Law360 reported, Judge Orrick also pointed the copy-and-paste problem, pointing out that many of the traders’ claims had been lifted from a separate lawsuit against BitMEX in New York. As far as his ruling goes, this suit appears to be dead – the plaintiffs cannot bring the case up again, with their request for further amendments rejected by the judge.

Despite this, the plaintiffs appear resolute in their mission to seek justice. Pavel Pogodin, their legal representative, told the news source that the judge had refused to cite a single case to support his assertion that they had copied content. Pogodin added that the plaintiffs would seek justice elsewhere – most likely in a California state court.

A spokesperson with BitMEX gave comment on the ruling,

“Pavel Pogodin has engaged in a long-running campaign to harass and attempt to extract settlements from not just BitMEX, but other crypto companies too, through filing spurious “copy and paste” lawsuits. The court's decision on this is unequivocal, and we are delighted that these ridiculous claims have rightly been entirely dismissed by the Judge.”

BitMEX’s Legal Woes Continue

BitMEX has been through quite the wringer in 2021. The company has been fighting one legal battle after another, all stemming from charges brought by regulators last year.

In August, the Commodity Futures Trading Commission (CFTC) confirmed in a statement that the U.S. District Court for the Southern District of New York had reached a consent order for BitMEX and HDR – as well as sister organizations 100x Holdings Limited, Shine Effort Inc., ABS Global Trading Limited, and HDR Global Services Limited. The agreement also included the Financial Crimes Enforcement Network (FinCEN)

As part of the agreement, BitMEX will pay a civil monetary penalty of $100 million for “illegally operating a cryptocurrency trading platform and anti-money laundering violations.” The company will also need to hire an independent consultant to conduct a historical analysis of its transactions to determine instances where it failed to report any suspicious activity. Acting CFTC chair Rostin Behnam said,

“This case reinforces the expectation that the digital assets industry, as it continues to touch a broader pool of market participants, takes seriously its responsibilities in the regulated financial industry and its duties to develop and adhere to a culture of compliance.”

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