[Update 07:24 UTC, July 24: Adds BitMEX response in fifth paragraph.]
BitMEX is going through a category motion lawsuit accusing the crypto derivatives platform of fraudulently engineering buyer liquidations to grab merchants’ Bitcoin collateral.
On Thursday, BKX Providers Inc. and David Namdar filed the grievance in the US District Court docket for the Southern District of New York. The plaintiffs allege they misplaced a mixed 622.66 BTC by means of compelled liquidations on BitMEX, with BKX claiming losses of at the least 305.81 BTC and Namdar alleging losses exceeding 316.85 BTC.
The lawsuit revives long-running allegations in regards to the platform’s inside buying and selling operations and liquidation engine and comes simply because the trade is getting ready to shut in September.
“BitMEX intentionally developed a system that profited from the liquidations,” the plaintiffs alleged. The grievance claimed that an inside buying and selling desk had entry to personal buyer info and will proceed buying and selling throughout server freezes that prevented extraordinary customers from accessing or closing their positions.
“BitMEX has had many such claims in opposition to the platform in our historical past and has efficiently handled every one,” a BitMEX spokesperson informed Cointelegraph. “That is one more opportunistic declare with no foundation; we look ahead to vigorously defending ourselves once more this time.”
BitMEX customers search Bitcoin return beneath fraud claims
In accordance with the submitting, BitMEX allowed prospects to make use of leverage of as much as 100 instances their collateral, then routinely liquidated positions whereas collateral was nonetheless allegedly value twice the losses incurred.
The remaining BTC was positioned into the platform’s insurance coverage fund, permitting BitMEX to revenue from compelled liquidations, the plaintiffs declare.
The plaintiffs are searching for the return of the allegedly withheld Bitcoin in addition to compensatory and punitive damages. They purpose to characterize US prospects who bought BTC swap merchandise in transactions courting again to July 23, 2018.
Associated: BitMEX delists 65 trading pairs, derivatives in July amid exchange shutdown
The grievance additionally pointed to a category motion filed in 2020 by Brett Messieh and different merchants alleging related conduct. That case, which introduced claims beneath the Commodity Change Act, was voluntarily dismissed with out prejudice on June 30, 2025.
Lawsuit lands as BitMEX proclaims shutdown
The proposed class motion lawsuit was filed on the identical day BitMEX announced that it would close after 11 years of operation.
BitMEX mentioned it might cease offering providers on Sept. 23 after a strategic overview by its proprietor, HDR International Buying and selling.
It has stopped accepting new registrations and plans to stop customers from opening new positions beginning on Aug. 26. The announcement was followed by a roughly 90% plunge in BitMEX’s BMEX utility token.
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