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A new lawsuit has been filed against BitMEX and its founders, accusing both the exchange and its former executives of racketeering, market manipulation, and money laundering among many other charges.
This new lawsuit has been filed by Dmitry Dolgov from Moscow, who claims that he suffered significant damages due to BitMEX’s illegal activities. Dolgov is seeking to be compensated “in the amount to be proven at trial,” and believes he “is entitled to punitive damages in the amount of $50,000,000.”
This new lawsuit comes on the heels of the United States Commodities Futures Trading Commission (CFTC) and Department of Justice (DOJ) pressing charges against BitMEX and its founders for running an unregistered trading platform as well as violating anti-money laundering and know-your-customer regulations, and for violating the Bank Secrecy Act, respectively.
Dolgov’s lawsuit supports the claims being made by the CFTC and the DOJ and even says,
“The entire account registration and funding process takes about 10 minutes and no documents are even looked at. 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.”
Ever since the CFTC and DOJ pressed charges against BitMEX and its founders, it has been all downhill for BitMEX.
The end is near for BitMEX
Shortly after the CFTC and DOJ pressed charges, BitMEX CEO Arthur Hayes, CTO Samuel Reed, co-founder Ben Delo, and Head of Business Development Greg Dwyer, resigned from their roles at BitMEX.
CTO Sam Reed was even arrested but released just a few days later on an appearance bond.
BitMEX’s legal troubles even prompted the company to hire its very first chief compliance office, Malcolm Wright–but will that be enough to combat the CFTC and the DOJ? At the moment, it is the United States government vs. BitMEX, and from what we know so far, there is a significant amount of evidence that indicates that BitMEX was operating in a legally-grey area.
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
