BitMEX hit with 623 BTC lawsuit on day it announces shutdown

cointelegraphPublished on 2026-07-27Last updated on 2026-07-27

Abstract

On the same day that cryptocurrency derivatives platform BitMEX announced its impending shutdown, it was hit with a class action lawsuit in New York federal court. Plaintiffs BKX Services Inc. and David Namdar accuse BitMEX of fraudulently engineering customer liquidations to seize Bitcoin collateral, alleging combined losses of over 622 BTC. The complaint claims BitMEX operated an internal trading desk with unfair advantages, including access to private customer data and the ability to trade during server freezes that locked out regular users, thereby profiting from forced liquidations. BitMEX has dismissed the lawsuit as an opportunistic claim without basis, vowing to defend itself vigorously. The legal action revives long-standing allegations against the platform and coincides with its owner's decision to cease all services on September 23, following a strategic review.

[Update 07:24 UTC, July 24: Adds BitMEX response in fifth paragraph.]

BitMEX is facing a class action lawsuit accusing the crypto derivatives platform of fraudulently engineering customer liquidations to seize traders’ Bitcoin collateral.

On Thursday, BKX Services Inc. and David Namdar filed the complaint in the US District Court for the Southern District of New York. The plaintiffs allege they lost a combined 622.66 BTC through forced liquidations on BitMEX, with BKX claiming losses of at least 305.81 BTC and Namdar alleging losses exceeding 316.85 BTC.

The lawsuit revives long-running allegations about the platform’s internal trading operations and liquidation engine and comes just as the exchange is preparing to close in September.

“BitMEX deliberately developed a system that profited from the liquidations,” the plaintiffs alleged. The complaint claimed that an internal trading desk had access to private customer information and could continue trading during server freezes that prevented ordinary users from accessing or closing their positions.

“BitMEX has had many such claims against the platform in our history and has successfully dealt with each and every one,” a BitMEX spokesperson told Cointelegraph. “This is yet another opportunistic claim with no basis; we look forward to vigorously defending ourselves again this time.”

BitMEX users seek Bitcoin return under fraud claims

According to the filing, BitMEX allowed customers to use leverage of up to 100 times their collateral, then automatically liquidated positions while collateral was still allegedly worth twice the losses incurred.

The remaining BTC was placed into the platform’s insurance fund, allowing BitMEX to profit from forced liquidations, the plaintiffs claim.

The plaintiffs are seeking the return of the allegedly withheld Bitcoin as well as compensatory and punitive damages. They aim to represent US customers who purchased BTC swap products in transactions dating back to July 23, 2018.

Related: BitMEX delists 65 trading pairs, derivatives in July amid exchange shutdown

The complaint also pointed to a class action filed in 2020 by Brett Messieh and other traders alleging similar conduct. That case, which brought claims under the Commodity Exchange Act, was voluntarily dismissed without prejudice on June 30, 2025.

Lawsuit lands as BitMEX announces shutdown

The proposed class action lawsuit was filed on the same day BitMEX announced that it would close after 11 years of operation.

BitMEX said it would stop providing services on Sept. 23 after a strategic review by its owner, HDR Global Trading.

It has stopped accepting new registrations and plans to prevent users from opening new positions starting on Aug. 26. The announcement was followed by a roughly 90% plunge in BitMEX’s BMEX utility token.

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Related Questions

QWhat is the primary allegation against BitMEX in the class action lawsuit detailed in the article?

AThe primary allegation is that BitMEX fraudulently engineered customer liquidations to seize traders' Bitcoin collateral by developing a system that profited from them, including through an internal trading desk that allegedly had access to private customer information and could trade during server freezes that locked out ordinary users.

QHow much Bitcoin (BTC) are the plaintiffs, BKX Services Inc. and David Namdar, collectively claiming to have lost?

AThe plaintiffs collectively claim to have lost 622.66 BTC through forced liquidations on BitMEX.

QWhat is BitMEX's official response to the lawsuit as reported in the article?

AA BitMEX spokesperson stated that the company has successfully dealt with many such claims in its history and called this lawsuit an 'opportunistic claim with no basis,' adding that they look forward to vigorously defending themselves.

QWhat specific actions is BitMEX taking as part of its announced shutdown, according to the article?

ABitMEX will stop providing services on September 23, has stopped accepting new registrations, and plans to prevent users from opening new positions starting on August 26.

QWhat is one of the remedies that the plaintiffs in the lawsuit are seeking?

AThe plaintiffs are seeking the return of the allegedly withheld Bitcoin as well as compensatory and punitive damages.

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