On July 23, 2026, as BitMEX announced it would shut down after 11 years in operation, a federal class action lawsuit was filed in the Southern District of New York accusing the exchange and its founders of misconduct.
The lawsuit names co-founder Arthur Hayes, Benjamin Delo, Samuel Reed, and former business head Gregory Dwyer, along with the exchange's parent companies HDR Global Trading and 100x Holdings.
Plaintiffs BKX Services Inc. and David Namdar are demanding the return of 622.66 BTC, valued at roughly $40 million, plus both compensatory and punitive damages.
The suit details allegations that BitMEX liquidated customer positions automatically even when the collateral held was about twice the amount of their losses. Instead of returning the excess to users, the funds were reportedly funneled into BitMEX's insurance fund.
According to the complaint, an internal "Insider Trading Desk" had exclusive "God access" to customer positions, allowing it to trade while clients were locked out during server outages.
BitMEX’s shutdown was scheduled for September 23, 2026, at 04:00 UTC, following a strategic review amid dwindling market share, which had fallen below 0.01% with daily volumes near $400,000.
The defendants had previously been pardoned by then-President Trump in March 2025 after pleading guilty in 2022 to Bank Secrecy Act violations.
The allegations specify that BKX Services experienced 13 liquidations between July and August of 2018, while David Namdar faced 14, including a massive 128.58 BTC hit in October 2019.
The case focuses on reclaiming specific bitcoin assets (replevin) and fraud accusations tied to how BitMEX managed leveraged positions and collateral.
