Market Watch | Bitcoin | $17,710 | 7 day: +12.5% | | Ethereum | $474 | 7 day: +1.8% | | All crypto | $495b | 7 day: +8.8% | | Bitcoin dominance | 66.2% | 7 day: +1.8% | Prices as of 5 p.m. EST
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BitMEX exchange faces a second lawsuit for racketeering and market manipulation. - We have previously covered the multi-billion-dollar charges faced by BitMEX's top executives here and here.
- The troubled cryptocurrency derivatives exchange is now facing a second lawsuit in California federal court by Păun Gabriel-Razvan, head of 24/7 Crypto News.
- Allegations include money-laundering and market manipulation by the exchange's operators, its parent company HDR Global, and Bitmex affiliates.
More: - The plaintiff alleges that BitMEX collaborated with its parent company HDR Global Trading Limited; founders Arthur Hayes, Ben Delo, Samuel Reed; and several alleged shell companies to frame and run a racketeering enterprise that has operated since January 2017.
- In contrast with the previous lawsuit, Gabriel-Razvan's suit does not mention Greg Dwyer, head of business at BitMEX.
- The suit alleges that Hayes, Delo, and Reed are "notorious fraudsters" who engaged in wire fraud, money laundering, and transporting stolen property across U.S. state borders. The plaintiff alleges that the purpose of BitMEX and its affiliate, ABS Global Trading, was to expedite, support, and procure various illicit activities.
- The filing includes sworn declarations from two former investors, Frank Amato and Elfio Guido Capone.
- The lawsuit filings also mention a shell company called Grape Park, and an individual called Mark Sweep.
- The lawsuit alleges that the defendants utilized ill-gotten funds to buy properties worth $2.5M in Norwell, Massachusetts, and Lake Tomahawk, Wisconsin, purchased under the name of Agata, Barbara, and Trace Reed.
- The plaintiff's counsel is Pavel I. Pogodin of Consensus Law. Pogodin, director of Puerto-Rican company BMA LLC, has also filed lawsuits against BitMEX, Ripple, and FTX.
Law360 
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 Quantstamp files a motion to dismiss a lawsuit, claiming that its QSP tokens are not securities. - Quantstamp, the issuer of QSP and a blockchain security solutions provider, argued in a dismissal bid that QSP is not a security in response to a securities fraud allegation brought by two former investors, Matthew Kuzmeskas and Brett Messieh.
- The plaintiffs cited that Quantstamp Inc., CEO Richard Ma, and CTO Steven Stewart misled investors in its white paper and during the Initial Coin Offering of QSP in November 2017.
- Quanstamp's legal counsel also argues that the complaint's tardy submission renders it unfavorable.
- The original class-action lawsuit, filed on Apr. 3, 2020, argues that the defendants violated state and federal securities laws by promoting, offering, and selling QSP to U.S.-based investors.
- The SEC offers a framework called the "Howey Test" to help issuers know if a cryptocurrency is a security.
- On Sept. 14, 2020, Kuzmeskas and Messieh submitted a 195-page amended complaint, which won approval to proceed from District Judge Loretta A. Preska. The two former investors were also appointed as the lead plaintiffs for the lawsuit.
- Quantstamp argues that the ICO occurred three years before the original complaint filing, exceeding the statute of limitations for the plaintiffs' legal challenge.
- Defendants requested a New York federal judge to reject the plaintiffs' amended argument and dismiss the lawsuit.
- Counsel to the defendants further claim that the new SEC Howey Test framework provides no unique insight into the case and should not extend the statute of limitations.
- The motion to dismiss also emphasizes that plaintiffs that the QSP token sale was based outside of the court's jurisdiction.
Law360
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 Bank of Japan, Osaka Japan's CBDC will take several years. - Hiromi Yamaoka, former head of the payments and settlements system at the Bank of Japan (BoJ), told Reuters that Japan will take at least a few years to issue a central bank digital currency (CBDC).
- An announcement published Oct. 9, 2020, by the Bank of Japan states that while the bank is analyzing distributed ledger technologies, it has no definite plans to issue a CBDC.
- CBDC experiments could begin in Japan next year. The BoJ would then decide whether to develop a digital yen.
- Yamaoka, currently the Board Director at Future Corporation, suggested that the BoJ could resolve large-scale outflows of private bank deposits by limiting the amount of digital currency held by any single entity. However, he also mentioned the downsides of this move, such as enhancing the value of the CBDC, causing fluctuations in conversion rates, and other considerations.
- During the interview with Reuters, Yamaoka, who oversaw the BoJ's research on CBDC, said that in the absence of plans for a CBDC, the BoJ and the private sector could collaborate to improve digital settlements.
Reuters
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 Bitstamp asks for court permission to subpoena Citibank (NYSE:C) and Bank of America (NYSE:BAC). - European cryptocurrency exchange Bitstamp wants to subpoena two of the largest Wall Street banks, Citibank and the Bank of America, according to a request submitted in the U.S. District Court for the Southern District of New York.
- The filing is related to an ongoing controversy since April between the exchange and its former payment processor, CNG Processing ApS (CNG), in a Danish court.
CNG Processing: - The exchange hired CNG as its payment processor to handle banking requirements on behalf of its customers.
- However, according to Bitstamp, the Danish payment gateway company failed to comply with its business agreements.
- Bitstamp claims that CNG unnecessarily delayed the opening of U.S. bank accounts. Even after it opened accounts, customers faced problems such as deposit and withdrawal limits, and unannounced limits on funds transfers.
- Bitstamp ended its partnership with CNG, reportedly demanding more than $1.7M as a security deposit refund and surrender of $1M worth of customer deposits. However, CNG refused, stating that Citibank and the Bank of America froze its accounts.
- The filing submitted on Nov. 13, 2020, highlights that CNG has not yet presented documents supporting the fact that the two banks actually froze CNG's bank accounts.
- Bitstamp users have been complaining about problems with withdrawals. In a tweet, Bitstamp suggests that the issues are related to CNG's legal proceedings, yet the exchange's team would categorically start processing fiat withdrawals.
TheBlockCrypto
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QUICK HITS - FBI agents apprehended the alleged operator of a $35M cryptocurrency ponzi scheme, Matthew Piercey of "Upvesting Fund."
- Digital asset manager Galaxy Digital and CI Global filed their application for a new fund in Canada that aims to track the price of bitcoin, CI Galaxy Bitcoin Fund.
- President Trump has nominated Brian Brooks, former chief legal officer at Coinbase and current Acting Comptroller of the Currency, for a five-year term extension.
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- ConsenSys has reunited with Truffle Suite, a decentralized application (dApp) development shop that separated itself from ConsenSys back with a $3M equity raise in 2019. (ConsenSys is an Ethereum-focused conglomerate founded by billionaire Joe Lubin.)
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 |  | Written and curated by wide-eyed bitcoin watcher since $1, Aaron Wise. Streaming headline junkie, Associated Press fanboy, eye-strained news terminal watcher, 2017 founder of Cryptocurrency Newsfeed. Temporarily based in Florida while awaiting the construction of cryptopia. |  | | Editor | Edited by Eduardo Garcia in New York. Eduardo is writing an illustrated book about climate change that will be published by Ten Speed Press, an imprint of Penguin Random House. Bylines in The New York Times, The Guardian, Slate, Scientific American, and others. In one of his previous lives, Eduardo worked as a Reuters correspondent in Latin America for nearly a decade. | |
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