BitMEX Faces 623 BTC Lawsuit on Shutdown Announcement Day

BitMEX is facing a new US class action lawsuit that accuses the crypto derivatives exchange of engineering forced liquidations in order to take traders’ Bitcoin collateral. The complaint, filed in federal court in New York on Thursday by BKX Services Inc. and David Namdar, alleges losses of more than 622 BTC across the plaintiffs caused by liquidation events they say were improperly triggered and timed.

The dispute also arrives at a sensitive moment for BitMEX. The exchange has announced it will shut down after a strategic review by its owner, HDR Global Trading, with services scheduled to end in September—an end date that could affect how remaining users approach disputed positions and collateral claims.

Key takeaways

• The plaintiffs claim BitMEX’s liquidation system profited from forced liquidations even when, according to their allegations, collateral should have remained sufficient.
• They accuse an internal trading desk of having access to private customer information and of being able to continue trading during events that allegedly prevented ordinary users from acting.
• The lawsuit seeks the return of allegedly withheld Bitcoin plus compensatory and punitive damages, targeting US customers who bought BTC swap products from July 23, 2018.
• The filing references earlier BitMEX-related class action allegations that were dismissed without prejudice on June 30, 2025.
• The complaint was filed the same day BitMEX publicly announced its plan to close services on Sept. 23.

Allegations tied to forced liquidations and collateral handling

According to the complaint filed in the US District Court for the Southern District of New York, the plaintiffs’ core allegation is that BitMEX’s system automatically liquidated positions in circumstances they say were not justified by the value of their collateral. The filing asserts that BitMEX enabled leverage of up to 100 times users’ collateral and then carried out liquidations while the plaintiffs allege collateral remained worth substantially more than the losses that were ultimately imposed.

In the plaintiffs’ account, the exchange’s insurance fund absorbed remaining Bitcoin after forced liquidations, which they say allowed BitMEX to benefit from liquidation events. The complaint argues that this mechanism effectively converted customer positions into profits for the exchange.

Central to the fraud claim is the allegation that BitMEX’s internal operations could continue while regular customers could not. The plaintiffs state that an internal trading desk had access to private customer information and that it could trade during “server freezes” that allegedly prevented ordinary users from accessing or closing their positions. The complaint frames this as a deliberate setup rather than a malfunction, alleging that the exchange deliberately developed a system that profited from liquidations.

What the plaintiffs want from the court

The lawsuit seeks the return of the Bitcoin that the plaintiffs say was withheld through forced liquidations, alongside both compensatory and punitive damages. The proposed class action would cover US customers who purchased BTC swap products in transactions dating back to July 23, 2018.

In terms of the specific amounts alleged, the complaint states that BKX Services Inc. claims losses of at least 305.81 BTC and Namdar alleges losses exceeding 316.85 BTC, for a combined total of 622.66 BTC.

Before this new filing, the dispute also has a history in the courts. The complaint points to a previous class action brought in 2020 by Brett Messieh and other traders, which asserted similar conduct and brought claims under the Commodity Exchange Act. That earlier case was voluntarily dismissed without prejudice on June 30, 2025, leaving room for new claims that mirror the allegations.

Case timing as BitMEX prepares to close

The new lawsuit was filed on the same day BitMEX announced it would shut down after 11 years of operation. BitMEX said it would stop providing services on Sept. 23 following a strategic review by HDR Global Trading, the exchange’s owner.

As part of the wind-down, BitMEX has stopped accepting new registrations and plans to block users from opening new positions starting on Aug. 26. The shutdown news was followed by market turmoil around BitMEX’s BMEX utility token, with Cointelegraph reporting a roughly 90% plunge after the closure announcement.

That timeline could raise practical questions for affected traders. With services scheduled to end in September and new position openings paused before then, users who believe their collateral was unjustly seized may have to focus quickly on legal remedies and any administrative steps available from the exchange—assuming any process exists while the platform winds down.

What happens next for traders and the exchange

For traders, the most immediate implication is that the legal fight may center on whether BitMEX’s liquidation behavior can be explained as ordinary risk management—or whether, as the plaintiffs allege, internal systems and access allowed outcomes that ordinary customers could not avoid. The claim that regular users were unable to close positions during “server freezes,” contrasted with the alleged ability of an internal desk to continue operating, is likely to become a focal point as the case progresses.

For BitMEX, the company’s exposure is heightened by the lawsuit’s attempt to frame the conduct as intentional fraud and by the scale of the alleged losses. BitMEX did not respond to Cointelegraph’s request for comment before publication of the report on the filing.

In the wider market, the case adds to the scrutiny that has long surrounded crypto derivatives exchanges—particularly when customer liquidations intersect with operational failures or internal market-making processes. As BitMEX approaches its planned shutdown, affected users may find themselves weighing whether to pursue claims now, wait for court outcomes, or rely on any remaining pathways the exchange may provide before services end.

Readers should watch for the court’s initial handling of the complaint—especially any motions tied to whether the class can be certified—and for how the allegations will be tested against technical records of liquidation and access during the periods in question. With the shutdown already set in motion, the pace of legal developments may matter as much as the merits of the case for the traders seeking their Bitcoin back.