BitMEX Co-Founder Ben Delo Faces Class-Action Lawsuit Over Alleged Market Manipulation
Rebeca Moen Apr 10, 2024 03:30
BitMEX co-founder Ben Delo faces a class-action lawsuit over alleged market manipulation, with a U.S. judge ruling that he played a central role in designing a liquidation system that allowed the exchange to profit from the scheme.
BitMEX co-founder Ben Delo, a British citizen, is set to face a class-action lawsuit from users after U.S. District Court Judge Andrew Carter determined that he played a central role in an alleged price manipulation scheme on the cryptocurrency exchange. The ruling came after Delo had asked to dismiss the suit, but Judge Carter concluded that he was instrumental in designing a liquidation system that allowed BitMEX to profit from the alleged manipulation.
The class-action lawsuit, filed on behalf of BitMEX users, alleges that the exchange engaged in market manipulation practices that resulted in significant losses for traders. The plaintiffs claim that BitMEX's liquidation system, which was designed to automatically close out positions when a trader's balance falls below a certain threshold, was exploited to manipulate prices and generate profits for the exchange.
According to court documents, Judge Carter stated that Delo's involvement in the development and implementation of the liquidation system was crucial to the alleged manipulation scheme. The judge noted that Delo's technical expertise and leadership position at BitMEX made him a key figure in the case.
This is not the first time BitMEX has faced legal troubles. In October 2020, the U.S. Commodity Futures Trading Commission (CFTC) charged BitMEX and its founders, including Delo, with operating an unregistered trading platform and violating anti-money laundering regulations. The exchange agreed to pay a $100 million civil monetary penalty to settle the charges.
The class-action lawsuit against Delo and BitMEX is part of a growing trend of legal actions targeting cryptocurrency exchanges for alleged market manipulation and other fraudulent practices. In recent years, several major exchanges, including Binance and Coinbase, have faced increased scrutiny from regulators and law enforcement agencies worldwide.
As the cryptocurrency industry continues to mature, it is likely that more legal challenges will emerge, highlighting the need for stronger regulation and oversight to protect investors and maintain market integrity. The outcome of the class-action lawsuit against Ben Delo and BitMEX could set an important precedent for future cases involving alleged market manipulation in the crypto space.
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