The FTX cryptocurrency derivatives exchange has just been hit with a $150 million lawsuit in the United States District Court for the northern district of California.
The lawsuit was filed earlier today (Nov 3) by plaintiff Bitcoin Manipulation Abatement LLC. In the suit, complaints include conspiracy to participate and participation in a pattern of racketeering activity, cryptocurrency market manipulation, aiding and abetting price manipulation, and unfair business practices.
The lawsuit is issued against FTX Trading LTD, Alameda Research LLC, Alameda Research LTD, as well as the FTX founding members.
A Multitude of Allegations Against FTX
According to the lawsuit, the defendants were caught red-handed attempting to manipulate the prices of Bitcoin futures on Binance. The defendants reportedly dumped futures contracts worth 255 BTC in an attempt to produce an “artificial price move that would trigger cascading execution of stop-loss orders and liquidations of futures long positions.”
Besides this, the plaintiff alleges that the defendants used multiple brokerage accounts to manipulate the market using methods that have been previously deemed illegal by the U.S. Securities and Exchange Commission (SEC). Additionally, FTX is accused of running an unlicensed money transmitting business with its OTC desk, while claiming that FTX sold around 50 million FTX tokens (FTT) to U.S. citizens at steep discounts.
The plaintiff BMA is currently seeking exemplary and punitive damages against all defendants, totaling $150 million.
As of yet, FTX has not directly responded to the allegations or issued a public statement regarding the lawsuit. However, moderators in the ‘FTX Official’ Telegram community have noted that a public statement on the allegations is “coming soon.”
In a recent Medium post, Alameda Research, the company which incubated FTX noted that the company has not been served, despite a complaint written by a patent lawyer circulating on the internet. Instead, According to Alameda Research, there is “no evidence of any wrongdoing,” arguing that the recent lawsuit is just a nuisance designed to simply waste resources and cause an annoyance to the defendant.
Since news of the lawsuit broke, the native utility token for the FTX exchange, FTX Token (FTT) has suffered slight losses. FTT currently sits at $1.37, down less than 1% in the last 24-hours. Nonetheless, the token is still up around 37% since its original list price.
Images courtesy of Shutterstock.
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