BitMEX hit with $300 million lawsuit

Cryptocurrency derivatives trading platform BitMEX and founder Arthur Hayes have reportedly been slapped with a $300 million lawsuit

BitMEX – one of the world’s largest and most popular cryptocurrency exchanges – and its founder Arthur Hayes have been slapped with a $300 million lawsuit, according to a report by Bloomberg.

Frank Amato and RGB Coin Ltd allege to have been the first seed investors in the platform back in 2015. They claim their $30,000 investment was supposed to have been converted into equity.

This conversion is now valued at more than $50 million, according to reports.

The suit claims neither party has been granted the equity. Amato also alleges that BitMEX provided him with false information.

The parties are seeking to recoup both the current value of their equity alongside $250 million in punitive damages.

Based on the estimated value of the stake, the exchange is now valued at roughly $1 billion.

Coin Rivet has contacted BitMEX for a comment. A spokesperson said:

“We will address Mr Amato’s claims through the proper legal channels and will not comment beyond that.”

BitMEX under fire

BitMEX has found itself under fire on multiple occasions this year.

Back in November, Coin Rivet reported on the exchange leaking thousands of customer emails.

At the time, the exchange posted the following statement: “We are aware that some of our users have received a general user update email earlier today, which contained the email addresses of other users.

“We are very sorry for the concern this has caused to our users.”

Hours after the leak, the exchange’s Twitter account was then subject to a hack.

Numerous financial agencies and watchdogs have also been keeping a close eye on the exchange over 2019.

The Financial Conduct Authority (FCA) – the UK’s financial watchdog – has been contemplating whether the exchange should be allowed to operate in the country after proposing a ban on cryptocurrency derivatives platforms such as BitMEX.

The Commodity Futures Trading Commission (CFTC) in the US has also been probing the platform to see whether it broke any rules by allowing Americans to trade.

BitMEX strictly states in its terms of service that US citizens are not permitted to trade on the platform. This rule was enforced in November 2018 when well-known analyst Tone Vays had his trading account terminated.

Interested in reading more BitMEX-related articles? Discover more about millionaire trader ‘The Boot‘ who turned $4,000 into $3 million while trading Bitcoin.

 

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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