Ousted Bitmex CEO sues former employer for wrongful termination

Alexander Höptner, the recently ousted CEO of crypto exchange operator Bitmex, filed a $3.4 million claim against his former employer over wrongful termination and breach of agreement.

Höptner’s filing to Singapore’s High Court today alleges Bitmex carried out a “baseless” internal investigation against him in order to avoid paying out millions of dollars in salary and bonuses. That investigation focused on his relocation from Hong Kong to Singapore, and later to Germany, and concluded that he misappropriated company funds to finance the moves — which served as the alleged basis for his dismissal in late October, according to the claim.

In the claim, Höptner’s lawyers call the company’s accusations “entirely without basis” and say he is owed $3.4 million by Bitmex, plus damages. That figure is comprised of a $2.4 million “second anniversary bonus,” wages, and housing and education allowances. 

The claim was filed by Kelvin Chia Partnership, Höptner’s legal representatives, in the General Division of the High Court of the Republic of Singapore against Three Fins Pte Ltd., a Singaporean offshoot of HDR Global Ltd., the Seychelles-registered entity behind Bitmex.

“I always acted in the best interests of the company during my tenure,” Höptner told The Block in an emailed statement. “I put my personal and family lives on hold in order to be on the ground in Singapore and Hong Kong. I’m disappointed that it has gotten to the point that legal proceedings are necessary, but I’ve been left with no choice.”

A hearing date has been set for Jan. 25.

A spokesperson for Bitmex said, “As the matter is pending before the Singapore Court, we are unable to make any substantive comments at this stage. We will respond to the claims made by Alexander Höptner in Court (which is the appropriate forum). Needless to say, we will defend the claim vigorously.”

Beyond derivatives

Höptner is a market structure veteran who earlier in his career spent more than 12 years at Deutsche Börse and stints as CEO of Börse Stuttgart and Euwax AG. He joined Bitmex in January 2021, just three months after the U.S. Department of Justice and Commodities Futures Trading Commission filed charges against Bitmex and its co-founders for operating an unregistered trading platform.

In August 2021, the exchange operator said it would pay a $100 million penalty to settle charges brought by the CFTC and the Financial Crimes Enforcement Network (Fincen). Its former CEO Arthur Hayes and his fellow co-founders Benjamin Delo and Sam Reed later paid $10 million each in separate settlements, after pleading guilty to violating the Bank Secrecy Act.

Höptner was tasked with rebuilding an exchange that had previously dominated the crypto derivatives market. He espoused a “beyond derivatives” strategy that centered on expanding Bitmex’s suite of services to include spot trading and custody products.

Perhaps the defining moment of his tenure at Bitmex was a failed attempt to acquire Bankhaus von der Heydt, a 268-year-old German bank. The acquisition was announced in January this year — but was subject to approval by BaFin, the German regulator. Both parties mutually agreed to abandon the acquisition in March. One week later, The Block revealed that Bitmex had laid off 75 staff — roughly a quarter of its global headcount at that time. Further layoffs were reported in November, shortly after Höptner’s departure.

Cost cutting

Höptner was informed sometime between July and September that Bitmex co-founders Hayes and Reed were looking into the money he had spent on relocating, according to the claim. He was officially notified that Bitmex was investigating his expenses in late September.

On Oct. 20, Bitmex informed Höptner in a letter that he had been “terminated for cause” after the investigation concluded he had used his position as CEO “to dishonestly misappropriate some $230,000 of the Group’s funds to fund his personal and unauthorized relocation from Hong Kong to Germany.” Because of this allegation, Bitmex told Höptner he was no longer entitled to any further payments.

Höptner’s lawyers stated in the claim that his relocation plans were discussed “at various meetings” — that Hayes and other executives attended — and were approved at the time. He also offered to bear any personal relocation costs, according to the claim, and has so far repaid $80,000 of a total of $230,000 incurred between March and September this year, according to the filing.

Between September and October Bitmex co-founder Reed informed Höptner that the issue of his expenses had arisen amid an “extensive cost-cutting and restructuring program which involved numerous lay-offs,” the claim states. It adds that the investigation, after the fact, “was nothing more than an attempt by the HDR Group to cut costs at all levels despite the fact that the issue of the Claimant’s relocation and its associated costs had been duly authorized.”

“I was hired to scale the company, and in partnership with the board, we did. We had made a lot of progress which made my wrongful termination a massive surprise,” Höptner said in a statement. “The founders always saw me and my team as caretakers in my opinion. They expected us to manage the company until they found some way to return.”

The case is number HC/OC 469/2022.

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