BitMEX is in hot water, hit with a class action lawsuit accusing the exchange of withholding 622.66 Bitcoin from users through its liquidation system. This legal move coincides with BitMEX's announcement that it will shut down its trading platform in September.
Details of the Lawsuit Against BitMEX
The case was filed by BKX Services Inc. and trader David Namdar in the U.S. District Court for the Southern District of New York. They claim combined losses of over 622 BTC due to forced liquidations on Bitcoin perpetual swap contracts: BKX alleges 305.81 BTC lost, while Namdar says 316.85 BTC vanished from his account. The suit seeks to represent U.S. customers who traded these contracts since July 23, 2018.
Central to the complaint is the claim that BitMEX's liquidation system prematurely closed positions before users’ collateral was fully depleted, allowing the exchange to retain excess Bitcoin. Instead of returning leftover funds to customers, the lawsuit alleges BitMEX funneled this collateral into its insurance fund, profiting from the liquidation events.
also the plaintiffs accuse an internal BitMEX trading desk of exploiting non-public customer data, trading during outages that locked regular users out of adjusting or closing positions. This internal advantage allegedly allowed BitMEX to benefit when liquidations were triggered during volatile market conditions.
This is not the first legal challenge of this kind. A similar class action filed in 2020 was voluntarily dismissed earlier this year. BitMEX has yet to publicly address these specific allegations.
BitMEX Confirms Platform Closure in September
HDR Global Trading, BitMEX's parent company, announced that the exchange will cease operations at 04:00 UTC on September 23. The decision follows a strategic review of their business in the context of the broader digital asset market. New account registrations will be disabled ahead of this date.
The timing of the lawsuit with the platform's imminent closure adds pressure on the exchange as it winds down. Traders and customers affected by the alleged liquidations are now seeking both the return of their Bitcoin and compensation for damages.
