BitMEX Co-Founders ‘Looted’ $440 Million from the Exchange: Lawsuit

The civil lawsuit against crypto derivatives Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term, BitMEX filed in the United States has taken another turn as the plaintiffs recently alleged the top officials were systematically looting $440,308,400 from the parent HDR’s accounts.

The motion was filed last Friday on behalf of plaintiffs BMA LLC, Yaroslav Kolchin and Vitaly Dubinin, and is asking for a court order to attach the assets of the crypto exchange.

The latest allegations detailed that the three co-founders, Arthur Hayes, Samuel Reed, and Ben Delo, siphoned the funds from HDR’s accounts after they became aware of the investigations by the US Commodity Futures Trading Commission (CFTC) and Department of Justice (DOJ).

A Major Lawsuit against a Crypto Exchange

The derivatives exchange was dragged to court by both the US agencies for several violations, including the violations of regulatory frameworks by offering services to the US-based clients and failing to implement KYC procedures and anti-Money Laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term procedures.

“From this information, it appears that Defendants were actively and deliberately looting Defendant HDR and trying to make its funds unavailable for the collection of future judgments against it,” the latest filings claimed.

“Specifically, the aforesaid profit distributions at a rate of $440,308,400.00 in just three months were clearly not performed in the ordinary course of business of Defendant HDR, as they represent $1,761,233,600 annual profit distribution rate, which money Defendant HDR simply does not earn.”

Meanwhile, the three co-founders are also facing criminal charges and stepped down from all management roles of the exchange and its parent 100x.

In a statement, a spokesperson from BitMEX denied all the recent claims made by the plaintiffs saying: “Pavel Pogodin of 'Consensus Law' has filed a series of increasingly spurious claims against us and others in the cryptocurrency sector. We will deal with this through the normal litigation process and remain entirely confident the courts will see his claims for what they are.”