Russian resident accuses BitMEX of money laundering and market manipulation

A Moscow resident Dmitry Dolgov filed a lawsuit against HDR Global Trading Limited, founders of the BitMEX exchange Arthur Hayes, Ben Delo, Samuel Reed and others. According to the plaintiff, the trading platform engaged in money laundering and manipulated the market.

According to the 188-page document, the exchange flouted Know Your Customer (KYC) policies and failed to meet anti-money laundering (AML) requirements, taking funds “from anyone, without questions”.

“Hackers, tax evaders, contrabandists and drug traffickers — all flocked to BitMEX, flooding the platform with hot money,” the suit states.

According to Dolgov, BitMEX “directly” participated in market manipulation and money laundering, causing him “significant damage”.

“The person involved in money laundering could open two accounts — a back-up account, on one or more exchanges used to calculate the index price (Coinbase Pro, Kraken and BitStamp) and an account directly on BitMEX. Then he could open a derivative position with high leverage on BitMEX, immediately executing market orders on the back-up account with maximum slippage to move the price in the desired direction,” the plaintiff explained.

As reported, on October 1 the U.S. CFTC filed a lawsuit against BitMEX and its owners, accusing them of operating an unregistered trading platform and violating CFTC rules with regard to KYC/AML procedures.

In addition, the U.S. Department of Justice charged the exchange’s leadership with violations of the U.S. Bank Secrecy Act.

The police arrested the CTO Reid on the same day. On October 9 was released on $5 million bail.

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