BitMEX's operator faces a £20m High Court claim that unapproved UK derivatives contracts are void

Everything else in the dispute follows from one short theory. Barber's claim contends that under the Financial Services and Markets Act 2000 the "contracts are void and that consumers are entitled to restitution of any bitcoin lost on those trades" ^[4]. On that reading the case turns on whether BitMEX needed FCA approval and lacked it ^[5]. Barber seeks the return of all the bitcoin he lost, or damages for trades going back a number of years ^[8].

Marketing is what brings the claim to the UK. The statement of claim says BitMEX "conducted promotional campaigns on a worldwide basis and did not exclude the United Kingdom from their reach" ^[6]. In our view that is the passage other platforms should read first, since it ties UK exposure to where advertising landed. BitMEX is a Seychelles-based company ^[12].

Barber's pleading also leans on the regulator. It says the FCA issued a warning on or around 3 March 2020 that the defendant may have been conducting trading in regulated investments in the UK without authorisation ^[9]. That date sits inside the 2018 to 2022 period of Barber's losses ^[3], so some of the trades he complains of came before the warning and some after ^[16].

Calling the case a template is the claimants' framing. Their own lawyer limits it. Gareth Keillor, a partner at Seladore Legal, the firm representing Barber, said: "The proceedings may also have wider relevance. Other UK-based persons may have entered into similar contracts with BitMEX, although whether any individual has a claim will depend on the particular facts and trading history." ^[18] A win for Barber would help other investors only to the extent their facts matched his.

Their estimate of the bill is conditional as well. Barber's lawyers say that if he succeeds, the bill for BitMEX could run into hundreds of millions of pounds ^[19]. Taking £200m as the floor of "hundreds of millions", that is at least ten times Barber's own £20m ^[15]. It would take ten claimants with losses his size, or more claimants with smaller ones.

This week the story is a pleading that the defendant says it has not received. A BitMEX spokesperson said: "No such claim has been served on HDR Global Trading Limited." ^[13] The statement addresses service only. With the exchange shut, the report does not say what assets HDR Global Trading holds, so whether a judgment could be collected is open.