BitMEX Early Investor to Sue $300M

One of the early investors of BitMEX is convinced that the exchange management deceived him by not providing a share in the company that reached $ 50 million, The Block reports.

According to a lawsuit filed with the San Francisco Supreme Court, Grasshopper Capital partner Frank Amato claims that BitMEX and its CEO Arthur Hayes refused to grant him a 0.5% stake in the company’s registered capital.

According to the plaintiff, BitMEX is currently valued at approximately $ 10 billion. Thus, the current share of the investor in the company should be at least $ 50 million.

Amato hopes to sue the exchange for $ 300 million in compensation and fines for outstanding obligations under a financing agreement in exchange for a share in the company (Simple Agreement for Future Equity, SAFE).

According to the plaintiff, in June 2015, he invested $ 30,000 in BitMEX, appreciating the future potential of the company. At the same time, Hayes repeatedly convinced Amato that his investment was an “investment in authorized capital,” thanks to which he would receive a 0.5% stake in the company after the next round of financing.

On information and belief, without the infusion of cash, Defendants would not have been able to pay their bills or continue to grow the platform. As a result, BitMEX likely would nothave been the platform it is today without Plaintiff’s generous and business-saving investment.
 

Bitmex VS Amato Suit

According to the document, from 2015 to 2018, Amato was sure that his name was included in the BitMEX capitalization table. Moreover, he regularly received monthly reports from Hayes on company activities.

Amato suspected something was wrong in 2018 during the Consensus conference, where Hayes appeared to the public at the orange Lamborghini.

Then the head of BitMEX assured the investor that his shares would soon be converted into ownership. After some time, Amato contacted Hayes to find out the exact amount of his share in the capital, but he replied that the funds had not been converted into shares, because “there was no equity financing.”

Amato, among other things, claims that San Francisco-based venture capital firm SOSV also invested $ 30,000 in the stock exchange, but in exchange for 5% of the capital. The plaintiff is convinced that BitMEX hid this information from him.

According to a post on Medium, SOSV claims to be BitMEX’s sole institutional investor.