Court dismisses BMA LLC’s suit against BitMEX over market-manipulation allegations

A court dismissed the lawsuit by BMA LLC against the cryptocurrency derivatives exchange BitMEX. The judge found that a substantial portion of the allegations duplicated other complaints against the platform, according to Law360.

In May 2020, BMA LLC filed a suit against BitMEX and its co-founders Arthur Hayes, Ben Delo and Samuel Reed. The company alleged that in 2019 nearly 15% of the platform’s trading volume (about $138 billion) was attributed to U.S.-based traders, yet the exchange did not have the licenses required to provide services to residents of the United States.

According to the report, Judge William Orrick dismissed the allegations of market manipulation, incitement to fraud, and violation of the Racketeer Influenced and Corrupt Organizations Act (RICO). He noted that the documents submitted by the plaintiff were ‘indirect’ and ‘unduly verbose’.

“Scale and excessive verbosity in themselves are grounds for dismissing the suit. I sought convincing statements, but I did not find any,” said Orrick.

In March, the court had already dismissed the initial version of the complaint, which ran to 237 pages and 600 paragraphs. Although BMA warned about the excessive volume of documents, the amended complaint contained 378 pages and 1,000 paragraphs.

The judge stressed that the market-manipulation allegations were copied from another complaint filed against BitMEX in New York.

“I will not consider copies of allegations whose validity will be determined by another court. Other arguments by the plaintiffs are also without merit,” according to the court’s decision.

Orrick barred the filing of a new version of a similar suit. In an interview with the publication, BMA’s representative, Pavel Pogodin, said that the judge “did not put forward a single argument in support of his assertions about copied materials”.

In August, BitMEX settled the civil dispute with CFTC and FinCEN, agreeing to pay a $100 million fine.

In March 2022, the platform’s founders will stand trial.