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Plaintiffs accusing BitMEX of market manipulation and racketeering crimes will be unable to re-file their complaint after it was dismissed for the second time by Judge William Orrick.
A U.S. District Judge dismissed modified racketeering allegations brought by traders against HDR Global Trading, the main firm of derivatives exchange BitMEX, noting that many of the plaintiff’s complaints were copied and pasted from another action filed against the platform.
On Sept. 7, Judge William Orrick dismissed the plaintiff’s claims that BitMEX had engaged in market manipulation, fraudulent inducement, and violated both the Racketeer Influenced and Corrupt Organization Act (RICO) and Commodity Exchange Acts.
According to Law360, Judge Orrick concluded the filings were “conclusory” and “prolix” in nature, stating:
“The size and prolix nature […] alone are grounds for dismissal. I have also searched for a plausible claim and cannot find one.”
The amended complaint was filed by a group of cryptocurrency traders, including BMA LLC — a company formerly known as “Bitcoin Manipulation Abatement” that is well-known for bringing lawsuits against high-profile cryptocurrency firms — after Judge Orrick rejected an earlier version in March on the grounds that it was overly wordy.
Despite the court’s specific warning that the prior 237-page, 600-paragraph complaint was excessively large, the plaintiffs’ amended complaint was 378 pages long and had over 1,000 paragraphs.
The judge also ruled the amended complaint included accusations of market manipulation that had been copied and pasted from a different lawsuit filed against BitMEX in New York.
“I will not consider those copied allegations, for which the Messieh court will determine plausibility,” Judge Orrick said. “Plaintiffs’ other allegations are insufficient for the same reasons identified in my previous order.”
The plaintiffs are not entitled to re-file the lawsuit, and Orrick denied their request for additional changes. The plaintiffs’ legal counsel, Pavel Pogodin, refuted the judge’s contention that their amended lawsuit contained copied information, telling Law360 that “Judge Orrick did not identify a single example to back his assertions regarding the copied material.”
Individual traders who dropped the complaint without prejudice earlier this month, according to Pogodin, aim to re-file the allegations in a California state court.
Judge Orrick chastised the plaintiffs’ lawyer in July after they claimed the judge did not comprehend bitcoin and promised to teach Orrick the “basics” of digital assets. Judge Orrick declined the offer, noting, “concentrate on the task at hand — convincing me that they have articulated a reasonable allegation.”