BitMEX sued over 623 BTC in liquidations as exchange winds down
Regulation & Gov ·
A class action filed against BitMEX accuses the platform of manipulating trades and seizing customer collateral through forced liquidations, arriving the same day the exchange confirmed it would close.
BKX Services Inc. and David Namdar brought the suit, alleging that BitMEX's own trading desk tapped into customer account data and kept trading even while servers were down and users could not log in, according to cryptopotato.com. Combined, the two plaintiffs say they lost close to 623 BTC, with Namdar claiming over 316.85 BTC and BKX around 305.81 BTC in the disputed liquidations.
The complaint centers on how BitMEX handled leveraged positions, which the platform allowed up to 100 times collateral. Plaintiffs argue that trades were closed out before all posted assets had actually been consumed, leaving leftover BTC collateral worth more than what traders owed. Rather than returning that surplus, the filing contends BitMEX routed it into its own insurance pool, effectively letting the exchange profit from the liquidations it triggered.
The case seeks class status covering U.S. customers who traded BTC perpetual swap contracts going back to July 23, 2018, and asks the court to order recovery of seized crypto along with damages. It is not the first time BitMEX has faced this kind of accusation: a 2020 suit brought by Brett Messieh and others made similar claims about rigged trading conditions, though that case was dismissed for insufficient evidence. Additional detail on the theft and insider-trading allegations is laid out at leviathan.news, and the timing relative to the shutdown announcement is covered by coindesk.com.
The lawsuit lands just as HDR Global Trading, which owns BitMEX, moves to unwind the platform following a strategic review, with the shutdown set to take effect September 23. New account signups have already been halted, leaving existing traders able only to close out positions. BitMEX co-founder Arthur Hayes addressed the closure separately, thanking partners, staff and customers and describing the wind-down as happening "responsibly on our own terms."
What remains unresolved is whether the pending shutdown will complicate efforts to recover the disputed BTC, and how a court will weigh the new claims against the precedent set by the dismissed 2020 case. Whether other traders join the proposed class, and how BitMEX responds to the specific insurance-pool allegations, are still open questions as the exchange winds down its operations.