A new lawsuit has been initiated against the parent company behind Bitcoin company BitMEX. The management, including CEO Arthur Hayes, is alleged to have systematically „plundered“ the company accounts of HDR Global Trading Limited.
The amount involved is huge: $440 million, or more than 31,400 Bitcoin, which would have been embezzled.
Apparently the (old) management felt wet when the Commodity Futures Trading Commission (CFTC) investigated the derivatives exchange in July 2019.
According to this new indictment (PDF), filed by trading firm BMA LLC, Yaroslav Kolchin and Vitaly Dubinin, that investigation led to action and thousands of Bitcoin being taken away. They demand a direct seizure of the assets on HDR’s balance sheet.
They suspect that Hayes & co deliberately withdrew several hundred million dollars before the authorities seized the Bitcoin.
The indictment does not specify in detail where the funds went. HDR is formally registered in the Seychelles, but its corporate structure consists of a Christmas tree of private limited companies.
The figure of over 31 000 Bitcoin does not come out of the blue. BitMEX kept a war chest to cover possible (future) trade losses.
CFTC and FBI investigations
The indictment is in addition to ongoing investigations by the CFTC, the Ministry of Justice and the FBI. The authorities filed both criminal and civil indictments against the derivatives exchange on 1 October.
This is a substantial list of imputations. They have been civilly charged with facilitating money laundering in violation of the Bank Secrecy Act. There is a maximum term of imprisonment of 5 years per person.
In addition, the CFTC suspects that it has served US investors without a valid license and other registration.
This is because Bitcoin Optimizer offers high-risk investment products (revolving futures), which allow speculation on the future Bitcoin price.
For years, it has been the place to gamble on the price. Meanwhile, competitors such as Binance and Bybit are eating up BitMEX’s market share. Investors may not wait to be seized by the FBI and take Bitcoin off the stock market.
According to a spokesman for the HDR, the new allegations are false.
„We are familiar with Mr Pogodin who has already made a series of false claims against us and others in the Bitcoin industry. We will deal with them formally and look forward to a court ruling with confidence“.
The price of Bitcoin was shot through the EUR 12 000 mark this weekend, the highest since January 2018.