BitMEX co-founder faces class action lawsuit in US

In the United States, a federal judge has ruled that Ben Delo, co-founder of the crypto exchange BitMEX, will face a class action lawsuit filed by users of the exchange. This lawsuit follows allegations of price manipulation in which Delo is said to have played a central role.

Key figure for alleged manipulation activities

Delo, who is a British national, had requested in May that the case be dismissed on the grounds that American courts would not have jurisdiction over him. However, Judge Andrew Carter of the New York District Court denied this request in an order signed on April 3 and published on April 8.

According to Judge Carter, the plaintiffs have convincingly argued that Delo intentionally took advantage of the jurisdiction of the United States. The order emphasizes that Delo was a key figure in the alleged manipulation activities and was responsible for designing a liquidation system that allowed BitMEX to profit from these manipulations.

Trading desk with full access to client accounts

In April 2020, a group of BitMEX users filed a lawsuit against BitMEX and its co-founders Delo, Arthur Hayes, and Samuel Reed. They alleged that the trio operated a trading desk that had full access to BitMEX customer accounts, allowing them to anticipate and profit from market moves that would liquidate users.

The indictment alleges that BitMEX continued to trade against the interests of its clients, despite claims that the trading desk played a neutral role in the market. Delo is said to have traded personally on the platform, taking advantage of benefits that were not disclosed to customers.

Request to dismiss has been denied

Furthermore, Judge Carter denied a motion to dismiss the case against BitMEX and its parent company HDR Global Trading, emphasizing that there was sufficient evidence that the trading desk operated out of BitMEX’s Manhattan office.

In June 2022, Delo was sentenced to a 30-month suspended sentence following a guilty plea in February for failing to comply with anti-money laundering program requirements at BitMEX, in violation of the Bank Secrecy Act. Hayes and Reed, who pleaded guilty along with Delo, received suspended sentences of two years with six months of house arrest and 18 months respectively.