Key facts
- BitMEX faces a proposed class-action lawsuit alleging fraudulent liquidations and theft of customer Bitcoin collateral.
- Plaintiffs BKX Services Inc. and David Namdar claim combined losses of 622.66 BTC.
- The lawsuit alleges BitMEX's internal trading desk had access to private customer data during server freezes.
- BitMEX announced it will cease operations on September 23, following an 11-year run.
- New user registrations are closed, and new positions will be prevented from August 26.
Crypto derivatives exchange BitMEX is facing a proposed class-action lawsuit in the U.S. alleging that it fraudulently engineered customer liquidations to seize traders' Bitcoin collateral. The complaint, filed in the U.S. District Court for the Southern District of New York by BKX Services Inc. and David Namdar, claims they lost a combined 622.66 BTC through forced liquidations, with BKX alleging at least 305.81 BTC and Namdar at least 316.85 BTC.
The lawsuit revives past allegations against the platform, claiming an internal trading desk had access to private customer information and could trade during server freezes that prevented ordinary users from accessing or closing positions. Plaintiffs also allege BitMEX allowed leverage up to 100 times collateral, automatically liquidating positions while collateral was allegedly worth twice the incurred losses, with remaining Bitcoin moved to the platform's insurance fund.
This legal action coincides with BitMEX's announcement that it will cease operations on September 23 after 11 years, following a strategic review by its owner, HDR Global Trading. The exchange has stopped accepting new registrations and will prevent users from opening new positions starting August 26. BitMEX has denied the lawsuit's claims and stated it will vigorously defend itself.