Lady luck was clearly miles away from the prominent cryptocurrency exchange BitMEX. While the exchange is still dealing with the allegations made by the regulators of the United States, another set of changes have come in the way of BitMEX. However, the latest lawsuit is from another country.
BitMEX Slapped With Another Lawsuit
While BitMEX is still recovering from the blow it endured in the first week of October, the exchange was slapped with another lawsuit. This time, it was a Russian citizen, Dmitry Dolgov. Once again, the founders of the platform, Arthur Hayes, Ben Delo, and Samuel Reed were in trouble as the Moscow resident alleged that they were part of racketeering activities.
Dolgov alleged that the trio along a few others had garnered billions of dollars through illicit activities. In a 188-page lawsuit, filed in the Northern District of California suggested that the exchange steered away from anti-money laundering as well as know your customer obligations. Dolgov in his lawsuit accused the exchange of garnering money from anybody and everybody without looking into their background.
The lawsuit read,
“[….]unlimited funds from anyone, without a single question asked. Understandably, because of total lack of controls of any kind, hackers, tax evaders, money launderers, smugglers, drug dealers all flocked to BitMEX flooding the platform with hot money.”
The lawsuit also alleged that the exchange was procuring benefits from engaging in money laundering as well as market manipulation. BitMEX reportedly did so by employing its internal trading desk as well as indirectly. Two exchange accounts were opened by every money launder, where one would be a helper account while the other would be a winner account on BitMEX. The lawsuit detailed,
“The money launderer (Defendants) would then enter into a large leveraged derivatives position on BitMEX and immediately execute market orders from the helper account with maximum slippage to move the index price in a favorable direction.”
Pavel I. Pogodin, the plaintiff’s attorney demanded a trial by jury for all the issues that were triable to a jury.
The previous charges from the CFTC as well as DOJ still remain intact. While Arthur Hayes was still being questioned, Samuel Reed found his way out of prison on bail.