The United States District Court of California had one of its judges dismiss a lawsuit levelled at the crypto derivatives exchange, FTX. The charges were of the sale of unlicensed securities within the US and of market manipulation
Obscure Business Files Complaints
The lawsuit itself was filed by an entity by the name of Bitcoin Manipulation Abatement LLC. The firm demanded $150 million from the exchange in exemplary and punitive damages.
The court order published a statement on Thursday explaining the event. The statement explained that Alameda Research LLC, the incubator of FTX, made a motion to dismiss Bitcoin Manipulation Abatement LLC’s filing. Originally, the action was scheduled for hearing on the 13th of February, 2020.
However, the court examined the papers submitted by both parties. The Court concluded that the “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).”
The complained, among other things, claimed that FTX’s official ran unlicensed money transmitting business through the use of its OTC desk. The exchange itself is even accused of attempting to attack Binance, one of the largest crypto exchanges in the world. The accusations were subsequently denied, with the court stating that “the Amended Complaint is dismissed in its entirety with PREJUDICE.”
The Attention of Giants
The court case even caught the attention of none other than Chanpeng Zhao, the CEO, and founder of Binance. Zhao stated that the whole lawsuit against FTX was “very far fetched.” Interestingly enough, Zhao stated that they had “resolved the issue long ago,” whatever that may mean.
Had a chat with the client. It was an accident, due to a bad parameter on their side. Not intentional. All good now.
— CZ Binance (@cz_binance) September 16, 2019
FTX’s incubator, Alameda, was also named in this complaint but wasn’t served any accusations itself.
The Accusing Company in Question
The complaint itself was filed by a man by the name of “Pavel I Pagodin, Ph. D, Esq.” Pavel acted as an attorney through his legal company, Consensus Law. He did this through the direction of “Bitcoin Manipulation Abatement LLC,” a company with absolutely no online presence.
— Samuel McCulloch (@traders_insight) November 3, 2019
The only proof of the company existing is through public records, showing that Bitcoin Manipulation Abatement LLC formed in March 2019. The residing agent of the company is cited as “Pagodin, Pavel”
How or even why this entire event transpired is still something that’s not wholly understood, with the company filing the complaint not even being on anyone’s radar. The complaint itself states:
“Defendants, and each of them were caught red-handed when, at about 21:00 EDT on September 15, 2019, and acting in furtherance of the manipulative and deceptive scheme as alleged hereinabove, Defendants, and each of them, made two illicit unsuccessful attempts to manipulate prices of Bitcoin futures listed on Binance cryptocurrency futures exchange.”