BitMEX has a lawsuit on its hands. However, it seems unlikely that the case will be able to ascertain any damages from the exchange.
In late April, a lawsuit was filed against BitMEX in the Superior Court of the State of California in San Francisco, The complaint has multiple counts levied against the exchange and a jury trial has been demanded.
The document of the first amended complaint has been released to the public.
New Lawsuit Against BitMEX
The plaintiffs in a new lawsuit against BitMEX are seeking damages on multiple counts.
The plaintiffs allege that BitMEX committed (1) fraud, (2) breach of contract, (3) breach of covenant good faith and fair dealing, (4) unjust enrichment, (5) negligent misrepresentation, and (6) promissory estoppel.
However, the lawsuit looks dead on arrival. Not only is BitMEX known for having great lawyers, but the plaintiffs, who go by the name ‘CAPONE TRUST,’ do not inspire much confidence.
Struggling to Regain Lost Ground
Aside from any legal troubles, BitMEX has struggled to regain the users it lost since March. The mega-crash on March 12 was widely blamed on the exchange and many have consequently stopped using it entirely. The exchange also experienced a few flash crashes earlier this year, including an XRP flash crash in February which angered traders.
On April 8, BeInCrypto reported that the BTC held by BitMEX dropped by 25% in the past month. This is the most drastic drop that the exchange ever recorded. BitMEX has also lost its top spot in the Bitcoin futures market. Now Binance and Huobi lead the market, with BitMEX dropping to a distant fourth.
On the legal front, BitMEX is still under scrutiny from regulators. The UK’s Financial Conduct Authority (FCA) said in March that the exchange has been operating without proper authorization. The FCA did not say whether it would take any extra steps.
Altogether, the exchange seems to be losing ground in the cryptocurrency market. Once the dominant player for margin trading by far, it has since slumped. There are now many alternatives, and BitMEX is no longer king. How this will bode for the exchange in the longer-term remains to be seen, but it is no longer the market leader it once was.