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BitMEX is charged with extortion and extensive illegal activity

May 18, 2020

BitMEX, one of the largest crypto exchange exchanges in the world, He was accused in court of “deliberately designed from the start” to allow for “a variety of illegal activities”.

The allegations were raised in an important new lawsuit filed by BMA LLC on May 16 at the US District Court for the Northern District of California.

Plaintiff accused BitMEX parent company, HDR Global Trading and the top executives of the stock exchange (Arthur Hayes, Ben Delo and Samuel Reed) Participate in or participate in several crimes including extortion, money laundering, money transfer fraud, and operating an unlicensed money transfer business.

BitMEX is charged with extortion and extensive illegal activity
BitMEX is charged with extortion and extensive illegal activity

On demand The accused are said to have participated “openly and without law” in these illegal activities and in many others whose size is considered “really amazing”.

Why is the case dealt with in California?

BMA LLC claims that despite their refutations, BitMEX executives maintain close ties to the United States and Northern California. The plaintiff cites several sources that are allegedly close to the company and have previously communicated to the media that U.S. traders account for nearly 15% of BitMEX’s 2019 trading volume, valued at around $ 138 billion.

It means that The exchange’s own data allegedly indicates that it processed an average of $ 3 billion in cash transfers per day without being licensed as a money transfer company in the United States..

This is “the record volume of such illegal activity in the entire history of currency regulation in the United States,” says the plaintiff.

The parent company, HDR Global Trading, whose name is said to be an acronym for Hayes, Delo and Reed, reportedly registered in the Seychelles. The plaintiff states that when asked why the company was founded in the country, Hayes stated publicly:

The Seychelles are cheaper to bribe than [los Estados Unidos]”And when asked how much he had to pay in the Seychelles to register BitMEX there, he said ‘a coconut’.”

Other allegations, if space permits

BMA LLC accused the accused of conspiring to do business through a “pattern of extortion activity” and participating in the manipulation of the cryptocurrency market, Wire fraud, fraudulent business deals and numerous other illegal systems.

The lawsuit states that BitMEX offers traders an extremely high trading lever (100x) for highly liquid derivatives, which are said to be calculated based on the prices of “two or three wallets without liquidity”.

The exchange is said to allow manipulators and money launderers to operate illegally by allowing them to open an unlimited number of anonymous and unverified accounts, without trading or withdrawal limits.

In the document BitMEX is said to deliberately freeze the server and use fraudulent “system overload” events to accept or reject certain trade orders during volatile market conditions to exacerbate price fluctuations and trigger maximum liquidations.

All of this is said to make BitMEX an “exquisite ‘design’ tool for bad players to manipulate cryptocurrency markets.”

The lawsuit also states that the accused themselves admitafter multiple rejections, that the exchange operates its own for-profit trading desk, which it allegedly trades against BitMEX’s own customers on the platform and uses inside information about its customers’ existing business positions.

All details of the extensive allegations span more than 100 pages.

Current controversy

As recently reported BitMEX has continued to lose both open interest and volume for Bitcoin futures (BTC) since the historic market crash in Marchand has attempted to defend its market share against competitors like Binance Futures.

After the fallen call from Black Thursday, Between March 13 and April 9, BitMEX saw a decrease in BTC stocks on the platform of almost 40%.

The controversy concerned two DDoS attacks that triggered and even caused downtime on the stock exchange Some industry players accuse the exchange of being responsible for Bitcoin’s multi-month lows in March.

BitMEX was also one of seven cryptocurrency companies involved in a number of new lawsuits for alleged violations of U.S. securities laws..