BitMEX Shrugs Off Newly Filed 106 Page Racketeering Lawsuit Aimed at Its Executive Team

TL;DR: Late-night of May 17, 2020 CoinSpice was given access to a newly filed, 106-page racketeering lawsuit aimed at the executive team of leading cryptocurrency exchange, BitMEX. The company appears to be underwhelmed at the charges, according to a statement in response to the matter, chalking it up to a suit-filing troll outfit bent on shaking-down cryptocurrency businesses.

BitMEX Shrugs Off Newly Filed 106 Page Racketeering Lawsuit

“The BitMEX Trading Engine is currently down,” the exchange alerted followers shortly before press time. “We’re working to bring it back online as soon as possible. Further updates to follow shortly.” And, sure enough, not long after the site was back up and trading resumed. Though seemingly unrelated to a recently-filed lawsuit, the occurrences are now par-for-the-course in the crypto speculation world, one veterans are used to and account for, but it also is a metaphor for the kind of week BitMEX is having.

From the lawsuit by BMA LLC against BitMEX

It follows a public relations pattern of shock headlines. The latest is a 106-page lawsuit against HDR Global Trading Limited, the group of executives behind BitMEX, comprised Arthur Hayes, Ben Delo, and Samuel Reed (the H., D., and R. respectively) by Puerto Rico-based corporation, BMA LLC (“Bitcoin Manipulation Abatement”). Case No. 3:20-cv-3345, filed in the United States District Court, the Northern District of California, San Francisco Division, claims BitMEX is in violation of racketeering laws, manipulating cryptocurrency markets, fraud, and more.

“We’re aware of a complaint filed by ‘BMA LLC,’ formerly known as ‘Bitcoin Manipulation Abatement, LLC,'” BitMEX acknowledged through a spokesperson by email. “Having reviewed a draft version of their complaint, which is clearly rehashed from information culled from the internet, we confirm we will be defending ourselves vigorously against this spurious claim. 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.”


Indeed, the filed suit has some unusual visual graphs (see above and below), and names reasonably well-known crypto influencers, such as Tone Vays, to prove standing in a US jurisdiction (BitMEX claims to not allow US customers). The May 16, 2020 filing calls BitMEX activities “brazen” and “lawless,” insisting much of its trades come from the US, amounting to unlicensed money transfers and even laundering. That the exchange is domiciled in  Seychelles, an archipelago of 115 islands in the Indian Ocean, off East Africa, means BitMEX, according to the suit, is openly flouting US laws.

From the lawsuit by BMA LLC against BitMEX

Combine that with allegations of luring traders through lackluster know-your-customer policies, and BMA concludes a pattern emerges. The rest are, as BitMEX pointed out in their response, long publically alleged gripes against the exchange: manufactured liquidations, a trading desk used to compete with its own customers, etc. Where the most interesting aspect of the suit might be is within BitMEX’s incorporated status. It does have offices in Singapore, Hong Kong, and the US, with, according to BMA, its San Francisco office being “the largest of all three by both the employee headcount and technical staff headcount.”

This isn’t BMA’s first crypto lawsuit rodeo, however. The outfit is being tagged as trolls by BitMEX due to their having similar lawsuits alleging price manipulation against FTX (case was eventually dismissed), and earlier this month they filed against Ripple Labs for securities laws violations related to XRP.

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