BitMEX Co-Founder Ben Delo Faces Class-Action Lawsuit Over Alleged Market Manipulation

A United States federal judge has ruled that BitMEX co-founder Ben Delo is set to face a class-action lawsuit. The lawsuit alleges that BitMEX used a scheme to manipulate prices on the exchange, with Delo playing a key role in the manipulation.

The ruling, issued by District Judge Andrew Carter of the New York District Court, marks a significant moment in the ongoing scrutiny of cryptocurrency exchanges and their operations.

Legal Challenge Against Delo

Despite being a British citizen, Delo tried to dismiss the lawsuit by arguing that the U.S. courts did not have jurisdiction over him. However, Judge Carter dismissed this argument in an order signed on April 3 and published on April 8, affirming that Delo had engaged sufficiently with the U.S. to warrant the court’s jurisdiction.

Judge Carter's ruling highlighted Delo's alleged role in the manipulative actions, particularly in the drafting of a “liquidation system” designed to generate profits for BitMEX during manipulative maneuvers.

Implications for Crypto Regulations

The lawsuit accuses Delo of approving key financial and trading decisions for BitMEX, including the operation of a trading desk referred to as having “God Access.” This access allegedly allowed BitMEX to manipulate market prices to its advantage.

As the legal proceedings against Ben Delo progress, the outcome of this lawsuit could have far-reaching implications for the cryptocurrency industry. It could impact how exchanges are designed and operated, especially in light of the increasing digitalization of money and its integration into the global financial system.

The BitMEX case highlights the need for regulatory clarity in the cryptocurrency space and the potential legal risks facing founders and operators of digital asset exchanges. It may also indicate a trend towards increased scrutiny and enforcement of laws in the digitization of currency trading.