Crypto traders try and fail to sue BitMEX over market manipulation — twice

The parent company of crypto exchange BitMEX shrugged off racketeering claims after a judge said they were copy-pasted from another case.

The parent company of BitMEX has shrugged off a second round of racketeering allegations after a judge said the latest submission against the embattled crypto exchange was too wordy and copied from another case.

As reported by Law360, allegedly spurned crypto traders’ claims of “brazen lawlessness” at HDR Global Trading, as well as market manipulation, RICO violations, and breaches of the Commodity Exchange Act, were first dismissed in March.

But crypto trading alliance BMA’s second attempt at making those allegations stick seems even less successful.

US District Judge William H. Orrick said the claims were “rife with ‘conclusory’ assertions and often lacked the specificity needed to survive in court.”

Orrick also said that:

  • like the original filing, the idea that the plaintiffs were conned into using BitMEX are “not supported by plausible facts,”
  • the traders failed to properly plead all the elements of their claims,
  • they were unable to sufficiently argue they had standing to lodge the suit in the first place.

In March, a New York court ordered BitMEX to pay $100 million to settle claims that it broke anti-money laundering and illegal trading laws.

According to Orrick, many of the latest allegations were flat out plagiarised from this case.

Plaintiffs failed to keep BitMEX claims short and sweet

When the court dismissed the first attempted claim in March, Orrick determined that plaintiffs, including BMA, were unable to demonstrate how BitMEX had hurt them.

But he also had another issue with the claim: the 237-page, 600-paragraph document was too long.

Curiously, even given Orrick’s explicit warning, the redrafted version came in at a mammoth 378 pages and more than 1,000 paragraphs.

In response to the dismissal, Pavel Pogodin of Consensus Law said that the judge simply didn’t understand cryptocurrency.

Pogodin then suggested he should undertake a tutorial to help him better understand digital assets.

“Cryptocurrency is a very new phenomenon, and we believe that Judge Orrick simply did not understand the case, the technology, the nuances of trading and the allegations against defendants,” Pogodin said.

He added: “Judge Orrick did not cite a single case to support his assertions regarding the copied material. Therefore, Judge Orrick was incorrect in making this determination.”

Four BitMEX insiders were charged with violating the Bank Secrecy Act last October. BMA’s claims against BitMEX are separate but anaglous.

Read more: [BitMEX’s first employee still at large but preparing to clear his name in court]

As you’d expect, this did little to sway the original decision. In summing up his order, Orrick said:

“After multiple iterations of the complaint and the benefit of my previous ruling, coupled with filing an unwieldy [second amended consolidated complaint] that remains conclusory and copies allegations from another case, I find that leave to amend is not warranted.”

The plaintiffs were also denied a request to resubmit their complaint a third time.

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