Imagine waking up to find your crypto trading platform suddenly freezing, while internal traders keep moving, and your funds get locked without a clear reason. This scenario is exactly what users of BitMEX, a major crypto derivatives exchange, are now accusing the company of through a proposed class-action lawsuit.
On July 23, two plaintiffs, BKX Services and David Namdar, filed a complaint in the U.S. District Court for the Southern District of New York. They claim BitMEX forced liquidations on their positions, despite their collateral still being sufficient to cover losses. Together, they say the exchange owes them a staggering 622.66 BTC, roughly $40.7 million. The lawsuit alleges that BitMEX designed its system to keep customer collateral locked and divert leftover bitcoin into its insurance fund.
More troubling are accusations that an internal trading desk at BitMEX had access to private user data and could continue trading even during server freezes that prevented regular users from closing positions. This suggests potential insider trading, putting customer funds at risk while the platform allegedly exploited technical glitches.
BitMEX, known for creating the perpetual swap contract, announced it will shut down operations on September 23, closing the doors after 11 years in business. The timing is notable, as the new lawsuit echoes claims from a 2020 class-action case that was dismissed in June 2025 without a verdict on the liquidation issues.
The exchange allowed traders to use up to 100 times their collateral, increasing both potential gains and risks. Plaintiffs accuse BitMEX of liquidating their positions prematurely and withholding the remaining collateral. The complaint names the parent company HDR Global Trading, its affiliates, and co-founders Arthur Hayes, Ben Delo, and Samuel Reed as defendants.
The legal action seeks to represent all U.S. customers who bought BitMEX bitcoin swap products since July 23, 2018, demanding the return of bitcoin, compensatory damages, and punitive damages. A judge must first approve the case to proceed as a class action.
BitMEX’s shutdown follows a strategic review and significant management changes. Last month, the exchange saw its CEO, CFO, and head of growth leave, signaling major upheavals behind the scenes.
