A cryptocurrency investor Frank Amato is suing BitMEX, legally Seychelles-based HDR Global Trading Ltd., in the Superior Court of California of the County of San Fransisco for investment fraud, Bloomberg reported on Wednesday.
The former JPMorgan & Chase Co. (NYSE: JPM) executive, in his petition, said that he was the first seed investor in the company's subsidiary and cryptocurrency exchange desk BitMEX in 2015, with a funding of $30,000.
The exchange desk's founder Arthur Hayes promised him equity in return, under a simple agreement for future equity, better known as SAFE agreement, but later failed to oblige, the petition said.
Amato alleged that BitMEX and Hayes went on raising new funds, but refused to acknowledge his right to hold equity in the company.
The Ohio-based investor alleged that BitMEX had been "unable to raise money from traditional investors and the platform was at the risk of failing," before he made the seed investment.
Amato is seeking up to $50 million in recovery of his investment from the exchange desk he describes as the "world's largest cryptocurrency trading platform," and another $250 million in punitive damages.
BitMEX is facing another probe by the U.S. Commodities and Futures Trade Commission on whether it broke any American laws in allowing the country's citizens to trade cryptocurrencies on its platform, Bloomberg reported in July.
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