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The parent company of the crypto derivatives exchange FTX, Alameda Research, has been slapped with a $150 million lawsuit for market manipulation. The mysterious plaintiff is known as the “Bitcoin Manipulation Abatement LLC,” an entity about which currently there are no details online, either to secure its anonymity or to suggest that a group of people is involved.
The lawsuit came into light through social media when Samuel McCulloch, host of podcast show “End of the Chain” shared images of the lawsuit document on Twitter. The tweet reads:
“@FTX_Official was just hit with a 150 mil lawsuit in California court. Charges include market manipulation, racketeering, unlicensed securities sale and more.”
According to the document posted online, FTX made unsuccessful attempts at manipulating the price of Bitcoin futures on the crypto exchange Binance. The document states that “one such attempt was perpetrated by dumping futures contracts for about 255 bitcoins, valued approximately $2,626,500, on to the newly opened Binance’s SAFU futures market, at market prices, in two-minute interval time.”
The plaintiff claims that FTX took advantage of its position and tried to manipulate the Bitcoin price by using momentum ignition algorithms. Even though that Bitcoin(BTC)trade is distributed across multiple cryptocurrency exchanges, there is still a possibility that such type of trading activity might successfully manage to manipulate the BTC price.
Alameda Research released a strongly worded blog post regarding the lawsuit soon after, stating that it never officially received the complaint. The post proceeds to call whoever is behind the lawsuit a “troll” and asserts that there is no evidence of wrongdoing, as there exists none. A did not hold back in the statement, calling the people who file “bullshit” lawsuits “assholes.” Classy.
In the blog post, Alameda Research proclaims that the lawsuit is filled with “laughable inaccuracies,” and that the plaintiff even failed to understand Alameda’s business model. The post goes on to cry out that the whole suit is based on conspiracy theories found across Twitter.
According to the circulating document, the attack happened on September 15, 2019. During that time, Bitcoin was trading at around $10,400, before crashing on September 23rd to the $8,000 level.
Price Manipulation in the Crypto World
This is not the first time that rumors and allegations of price manipulation have entered the crypto world. There have also been several researches and lawsuits regarding cryptocurrency price manipulations.
Some of these cases even include the US Department of Justice’s investigation against iFinex (Tether and Bitfinex parent company), CFTC probe against the crypto exchange BitMEX and a case against Bitcoin Cash ABC. Interestingly, all these lawsuits have yet to produce nothing substantial, but most of these cases are still open and ongoing.
AllStocks Crypto News will keep you posted on any new development regarding any of these cryptocurrency price manipulation cases.