BitMEX Faces $300 Million Lawsuit Over Lost Equity

The crypto news today show that a former JPMorgan derivatives trader sues one of the largest cryptocurrency exchanges and BitMEX faces $300 million in potential losses after it allegedly failed to deliver the trader’s equity.

An official filing with the Superior Court of the State of California in San Francisco dated December 4 shows that Frank Amato and RGB Coin are alongside pursuing action against the exchange. As BitMEX faces a new lawsuit, the CEO Arthur Hayes and owner HDR Global trading are looking to deal with this problem.

On the other hand, Amato’s claims show that he was among the first seed investors in BitMEX earlier in 2015 – and has contributed more than $30,000 on the understanding that he would later receive equity in the company. Amato alleges that this has never happened.

Following his initial investment, the exchange apparently received another $30,000 from the startup accelerator SOSV which would trigger Amato and his contracted equity conversion. Still, as BitMEX faces a lawsuit the filing states that Hayes “sought to conceal information” from Amato specifically to “prevent recognition of his equity.”

Unofficial reports also show that the share of the company that Amato has is now worth $50 million. So in total, the investor is seeking around $300 million as a settlement. The filing reads:

“Through this action, Plaintiffs seek damages representing the value of their equity interest in BitMEX, which is conservatively estimated to exceed $50,000,000, together with punitive damages of $250,000,000. Plaintiffs also seek injunctive relief and other remedies, together with their attorneys’ fees and costs.”

This move is definitely a headache and as BitMEX faces a new lawsuit, it is something that is piling up in the negative news as of recently. According to reports from earlier, the exchange has seen its popularity enduring despite a major data leak in November. Bitcoin news outlets showed that executives at the exchange appear a little concerned by the blunder which saw a lot of email addresses sent out to other users.

However, what still remains good is business – and daily trade volumes for the Bitcoin (BTC) derivatives are unchanged and currently at $1.6 billion. From this point, BitMEX is solid and remains one of the top exchanges in the world.