The founders chose to withdraw a lawsuit; this leads the case to a settlement out of court. Initially, both investors asked for at least 500 million dollars from BitMex.
Cryptocurrency exchange BitMex receives a spare from another lawsuit in court, thanks to an agreement of a monetary settlement with two of its former founders. Frank Amato and Guido Capone, two of BitMex’s early investors, will receive the sum of $ 44 million as part of the deal.
The founders started a set of legal proceedings against the exchange; these proceedings have as a goal the recovering of the capital they invested five years ago. At that time, Arthur Hayes – former CEO of BitMex – was looking to capture Frank Amato’s investment, sources close to the case say. Later, this former investor allied himself with Elfio Guido Capone; both accused the BitMex management of giving them misleading and deceiving information and of blocking any allowance for them to generate profits with the capital they previously invested.
Two Investors and a Huge Lawsuit
The two investors filed a lawsuit against BitMex for the value of 540 million dollars late in the year. The lawsuit is to get about 90 million belonging to the investment and recover at least 450 million in compensation for damages.
Even though the total sum they were seeking to obtain with this petition exceeded 500 million dollars, both Amato and Guido decided to solve the whole case for a sum that surpasses the figure of 40 million dollars. The lawsuit comes from the California Superior Court, and according to attorney Pavel Podogin, the investors are pointing to resolve the entire case out of court.
A Spiral of Harmful Effects Is Damaging the Exchange’s Popularity
In recent months BitMex encountered several lawsuit processes that have even caused a harmful spiral of effects on the popularity of the exchange.
For October, the firm suddenly made a registration of a withdrawal of more than 40,000 BTC in less than 24 hours, after BitMex was accused by the CFCT (Commodity Futures Trading Commission) of violating the current anti-money laundering regulations.
Samuel Reed is one of the co-founders of BitMex. He was arrested for violating these regulations as well as for making offerings of illegal trading services. Likewise, reports by platforms such as Chainalysis from transactions to BitMex began to represent a huge risk.
This legal conflict led Arthur Hayes to make a choice, and resign as CEO of the company; a new management train came to light and implemented a new KYC (know-your-customer) plan, a plan that still does not please the user community and crypto-environment well enough.
All this drama still has many layers, a user of the platform also started a lawsuit against the firm in November last year, the user accuses the platform of manipulating the market. These events are turning grey the entire legal spectre of BitMex, an exchange that keeps in active operations even after all these unfortunate events on its back.
By: Jenson Nuñez