Posted 5 months ago | by @devadmin

Bitmex and its executives face another lawsuit that alleges racketeering, money laundering, and market manipulation took place at the exchange.

The Block reports, that Păun Gabriel-Razvan, a resident of Bucuresti, Romania, has joined others accusing BitMEX’s internal trading desk of directly participating in manipulation schemes.

Gabriel-Razvan filed the lawsuit in the Northern District Court of California claiming that HDR Global Trading Limited, the parent company of BitMEX, the exchange’s founders Arthur Hayes, Ben Delo, and Samuel Reed and others, engaged in and aided racketeering activities, “earning Defendants billions of dollars in illicit profits.”

The complaint comes after a related lawsuit was filed against BitMEX and its founders by plaintiff Dmitry Dolgov, as Bitboy Crypto previously reported.  Dolgova resident of Moscow, Russia. Both Dolgov and Gabriel-Razvan are represented by the same attorney — Pavel Pogodin of Consensus Law, The Block pointed out.

“Pavel Pogodin of ‘Consensus Law’ continues to file spurious claims against us, and others in the cryptocurrency sector,” a BitMEX spokesperson told The Block. “As we’ve said before, regrettably, Mr. Pogodin operates just like a patent troll, filing ‘copy and paste’ complaints against us based on rehashed information culled from the internet. We will deal with this through the normal litigation process and remain entirely confident the courts will see his claims for what they are.”

The new lawsuit a massive 197 pages much like the previous alleges that the offenders ignored know your customer (KYC) or anti-money laundering (AML) requirements and accepted “unlimited funds from anyone, without a single question asked.” The lawsuit argues that as a result of overlooking these laws “hackers, tax evaders, money launderers, smugglers, drug dealers all flocked to BitMEX flooding the platform with hot money.”

Gabriel-Razvan’s lawsuit further claims that “BitMEX directly participates in and financially benefits from the market manipulation and money laundering through its internal trading desk and indirectly,” and details a conspiracy theory of how this action would occur.

“A money launderer (Defendant) would open two exchange accounts – a helper account on one or more exchanges used by BitMEX to calculate its index price (Coinbase Pro, Kraken and BitStamp) and a winner account on BitMEX,” the lawsuit explains. “The money launderer 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.”

Gabriel-Razvan insists that he experienced “significant damages” in an amount which will be proven at trial. “Plaintiff suffered the loss of property…Plaintiff seeks three times the amount of actual damages sustained, costs of suit, and reasonable attorney’s fees,” the attorney writes.

Pogodin further told The Block that Gabriel-Razvan was “defrauded out of 247.94 bitcoin,” which is estimated at around $4.4 million at the time of this report. “Under applicable law, we are seeking to recover three times this amount ($12.6 million), plus interest, costs, and attorney fees. In addition, we are seeking punitive damages of $50 million under California law,” said Pogodin.

Pogodin additionally told The Block that more “defrauded victims” of BitMEX are coming forward, and “more lawsuits are being prepared and will be filed shortly.”

Bitmex and its leaders are under investigation charged with various crimes jointly by the U.S. DOJ and U.S. Commodity Futures Trading Commission (CFTC.) The companies executives are also is being accused in another lawsuit of looting the company for millions.

Bitcoin is currently trading at [FIAT: $17,974.93] UP +0.1% in the last 24 hours at the time of this report.