FTX, the derivatives and cryptocurrency exchange that was hit with a $150 million lawsuit last month, has seen a judge throw out the case against it. The complainant, referred to in the filing as Bitcoin Manipulation Abatement LLC, had accused the exchange of Bitcoin futures price manipulation, but the judge in the case, Haywood S. Gilliam, Jr., has granted FTX’s motion to dismiss the case “with prejudice.”
FTX “Caught Red Handed”?
Bitcoin Manipulation Abatement LLC first filed the complaint on November 3, claiming that FTX, Alameda Research LLC (the quantitative trading firm behind the exchange) and a number of individuals associated with the two companies had been “caught red handed” manipulating Bitcoin futures prices on Binance’s then new futures trading platform. This had apparently been attempted by FTX dumping over $2.6 million worth of BTC with the intention to “cause an artificial price move that would trigger cascading execution of stop loss orders and liquidations of bitcoin futures long positions on Binance and propagate to other exchanges.”
Judge Sides with FTX
FTX denied this, calling the lawsuit “bullshit” and “riddled with laughable inaccuracies”. On the surface it seems that Judge Gilliam agreed, but in his two-paragraph summation of the case and his decision, the judge didn’t actually exonerate the defendants. Instead, the motion to dismiss seems to have been based on a technicality, given the reasoning for the dismissal of the case:
…plaintiff has failed to comply with the requirements of Fed. R. Civ. P. 9(b) or 8(a)(2), and that dismissal is warranted under Fed. R. Civ. P. 12(b)(1) and 12(b)(6).
However, the case was also dismissed “with prejudice”, which means it is dismissed permanently – Bitcoin Manipulation Abatement LLC can never again attempt this lawsuit. This would suggest that, in fact, the claims were so spurious, or the evidence so flimsy, that it should never be retried. Either way, FTX and Alameda have been absolved of any guilt and now can move on after what, for them, was a mercifully quick court case.