An investor named Frank Amato allocated USD $50 million to the exchange company in 2015 but did not receive the promised shares, so the investor now demands BitMEX.
Frank Amato sued BitMEX, one of the world’s largest cryptocurrency exchanges for USD $300 million after he allegedly received no shares from the company.
According to the December 4 lawsuit before the California State Superior Court in San Francisco, Frank Amato and RGB Coin LTD took action against the margin trading (BitMEX), its CEO Arthur Hayes and his HDR Global Trading owner.
Investor sues BitMEX
Amato, a former JPMorgan derivatives operator, said he was one of the first pre-seed investors for BitMEX in 2015, contributing $30,000 under the promise that he would later receive a portion of capital in the company. Amato alleges that this has not happened to this day.
After Amato’s initial investment, the exchange allegedly received another USD $30,000 from the startup accelerator SOSV, which would trigger the conversion of the agreed shares between Amato and BitMEX. However, the presentation states that Hayes “sought to hide information” from Amato specifically to “avoid recognition of his assets.”
According to unofficial estimates, Amato’s participation in the company is now worth USD $50 million. In total, the investor is looking for a great deal of USD $300 million. The lawsuit summarizes:
Through this action, Claimants seek compensation that represents the value of their shareholding in BitMEX, which is conservatively estimated to exceed USD $50,000,000, along with punitive damages of USD $250,000,000. The plaintiffs also seek precautionary measures and other remedies, along with the fees and costs of their lawyers.
Controversy surrounds BitMEX
BitMEX is no stranger to legal problems and regulatory pressures. In June, the U.S. The Commodity Futures Trading Commission (CFTC) launched an investigation into the company because it had allegedly allowed US-based merchants. UU. operate on its platform, which was not allowed at that time.
More recently, BitMEX reported that by mistake it exposed the email addresses of its users. However, the problem was resolved, as the company quickly confirmed that it was an error and that no other information was leaked.
The Seychelles-based exchange has become a giant due to the explosive growth of cryptocurrencies in the following years, exceeding USD $1 billion in volume of annual operations at the end of June 2019.
BitMEX has not yet issued an official response to confirm or deny the accusations.