BitMEX Racketeering Charge Dismissed for Second Time

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  • A BitMEX manipulation lawsuit has been tossed for the second time in six months
  • The judge in the case accused plaintiffs of copying and pasting material from another case
  • The case was dismissed with prejudice, meaning plaintiffs cannot refile

A lawsuit whose plaintiffs accused Bitcoin margin exchange BitMEX of multiple charges including racketeering has been thrown out by the judge for a second time. The complaint, brought by Bitcoin Manipulation Abatement, LLC (BMA) in May last year, had already been thrown out once by Judge William Orrick but he allowed the plaintiffs to reword their case and put it again. However, Judge Orrick accused the plaintiffs of merely copying and pasting complaints from another lawsuit BitMEX is fighting and dismissed the case, banning BMA from refiling.

Original BitMEX Case Thrown Out in March

The case against BitMEX is one of two that, until Tuesday, BitMEX was facing from two law firms representing users. This has now been halved to one after Judge Orrick dismissed the BMA case that alleged that BitMEX and its operators, including CEO Arthur Hayes, acted in a “brazenly lawless manner” in their operation of the exchange and accused them of servicing US customers without the proper licenses. Judge Orrick dismissed the initial claim in March but gave the plaintiffs leave to amend their argument, which they did and re-filed.

Copy and Paste Your Way to Defeat

However, the nature of the re-filing didn’t go down too well with judge Orrick, who had warned in March that the 237-page, 600-paragraph complaint had been too long. He presumably thought that the plaintiffs would reduce the length and complexity of their filing, but this is the opposite of what they did, instead filing a complaint that was 378 pages long and featured more than 1,000 paragraphs. Worse, much of the added material came directly (in many cases word for word) from a different lawsuit filed against BitMEX in New York.

All this extra information did not have the desired effect, as Judge Orrick said in his ruling on Tuesday that he “searched for a plausible claim and cannot find one”, despite the plethora of material now at his disposal. He dismissed the case with prejudice, meaning that BMA cannot refile the case, leaving BitMEX still facing the New York suit.