A cryptocurrency exchange founded by billionaire Reform UK donor Ben Delo is facing a £20 million lawsuit over allegations of mis-selling financial products in the UK. The lawsuit, filed by former investor Lewis Barber, claims that BitMEX offered crypto derivative products to UK investors without the necessary regulation or approval from the Financial Conduct Authority (FCA).

Background of the Case

Barber, a software engineer, alleges that he lost bitcoin valued at £20 million through trading derivatives offered by BitMEX between 2018 and 2022. These derivatives are said to amplify gains or losses based on the fluctuating value of cryptocurrencies. The claim, which has been filed at the high court but not yet served on BitMEX, argues that under the Financial Services and Markets Act 2000, such contracts are void, entitling consumers to restitution for any bitcoin lost.

Barber's lawyers suggest he may be one of many non-professional investors in the UK who suffered significant losses after being sold derivative products in violation of FCA rules and consumer protection laws. The lawsuit is directed against HDR Global Trading Limited, the owner and operator of the now-closed BitMEX exchange.

Allegations Against BitMEX

The statement of claim asserts that BitMEX conducted promotional campaigns globally, including in the UK. It highlights that:

  • An advertisement was placed in The Times on 3 January 2019, promoting the exchange.
  • The financial products offered to Barber did not comply with UK financial services regulations.
  • On 3 March 2020, the FCA issued a warning regarding BitMEX potentially conducting trading in regulated investments in the UK without authorization.