The Celsius bankruptcy estate has filed a lawsuit in the U.S. Bankruptcy Court for the Southern District of New York accusing several companies tied to BitMEX of fraud, market manipulation, and wrongful liquidation activity during the March 2020 crypto crash.

According to court filings, the estate alleges that BitMEX liquidated Celsius positions and seized Bitcoin collateral during the sell-off—actions it says were driven by an exchange “liquidation engine” that controlled liquidation trigger prices, executed orders, and received proceeds into an insurance fund. The complaint was filed on Sept. 12 by Celsius entities acting through the estate representative Blockchain Recovery Investment Consortium (BRIC), and was submitted just days before BitMEX is scheduled to stop exchange services on Sept. 23.

Key takeaways

The lawsuit alleges BitMEX liquidated Celsius-related positions on March 12–13, 2020, seizing 1,325.84 BTC and additional collateral linked to an investment fund.
The estate claims liquidation triggers and order placement on BitMEX were set in ways that produced deeper-than-necessary sell pressure during the crash.
The filing seeks roughly $490 million in Bitcoin recovery based on the value described at the time of writing, along with various forms of damages and fees.
BitMEX says it was hit by distributed denial-of-service (DDoS) attacks on March 13, a disruption the estate points to as evidence that its forced-selling mechanism suppressed prices.
The court filing leaves several damages figures to be determined at trial, rather than specifying all claimed amounts up front.

A complaint targeting BitMEX-linked entities

The Sept. 12 complaint names five defendants alleged to be connected to BitMEX: HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings, and HDR Global Services. It was filed in the Celsius bankruptcy proceedings and can be viewed in the PDF court docket submission provided with the report: https://cases.stretto.com/public/x191/11749/PLEADINGS/1174909152680000000029.pdf.

In the filing, the estate alleges BitMEX wrongfully liquidated Celsius collateral on March 12, 2020, seizing 1,325.84 BTC. It further alleges that, the next day, BitMEX liquidated 5,034.33 BTC from the investment fund JST. The complaint says JST later assigned related claims to the estate.

The lawsuit seeks recovery of Bitcoin worth nearly $490 million at the time of writing. It also requests actual damages of at least 6,360.16 BTC (or its current equivalent), along with either return of the Bitcoin in kind or payment of an equivalent market value. Additional requested relief includes statutory damages, punitive damages, treble damages where applicable, profits the estate says BitMEX earned from the liquidations, and legal fees and costs. The complaint does not quantify some of these additional claims, stating that amounts should be determined during trial.

Allegations of liquidation mechanics that worsened the crash

A central theme in the estate’s allegations is that BitMEX controlled key parts of the liquidation process. The complaint asserts that BitMEX determined the prices used to trigger liquidations, provided the “engine” that executed them, and managed the insurance fund that received proceeds from certain liquidated positions.

More specifically, the estate alleges that some liquidation sell orders were placed at prices more than 24% below the next-best ask available on the platform. The estate also claims that during the intensified liquidation cycle, Bitcoin traded at a lower price on BitMEX than on competing exchanges.

The court filing argues that these mechanisms contributed to downward price pressure, not merely reflected it. In the estate’s view, the timing of events around March 13, 2020 is particularly telling: it claims liquidation orders stopped when BitMEX became unavailable, and Bitcoin’s price then recovered. That pattern is presented as evidence that the exchange’s forced-selling activity had been suppressing the market price.

DDoS disruptions cited on March 13

The estate points to a March 13 service disruption as part of its argument that BitMEX’s liquidation activity intensified the sell-off. In support of the timing, the filing references statements by BitMEX indicating that the exchange experienced distributed denial-of-service (DDoS) attacks on March 13.

As described in BitMEX’s published response at the time, the exchange reported two DDoS attacks occurring at 02:16 UTC and 12:56 UTC on March 13: https://www.bitmex.com/blog/how-we-are-responding-to-last-weeks-ddos-attacks.

For investors and market participants, the practical question embedded in the litigation is straightforward: if exchange liquidation systems were operating in a way that pulled prices lower—potentially more aggressively than the prevailing order book suggested—then the impact of liquidations during crises may not be limited to “necessary” risk reduction. Instead, it could reflect specific matching and execution behavior inside a particular venue.

Why the timing and targets matter

The filing’s timing is notable. The complaint was submitted on Sept. 12, according to the report, and it arrives shortly before BitMEX is scheduled to stop exchange services on Sept. 23. That proximity raises the stakes for the bankruptcy estate, which is attempting to recover assets allegedly lost during a historic stress period for crypto markets.

The case is also not the first legal action tied to BitMEX’s liquidation behavior during the same window. Earlier coverage referenced in the source material noted that, on July 23, BKX Services and David Namdar filed a separate proposed class action alleging combined losses of 622.66 BTC from forced liquidations. That earlier complaint, as described in the source, alleged an internal trading desk could access private customer information and continue trading during server freezes.

In response to the July case, the source states that a BitMEX spokesperson told Cointelegraph the claims were an “opportunistic claim with no basis” and that BitMEX would defend itself. The report also notes that this statement was about the July lawsuit and not a response to the Celsius complaint.

What comes next for the Celsius estate

With the lawsuit seeking both direct recovery of Bitcoin and a broader set of statutory, punitive, and treble damages—while leaving some claimed amounts for trial—the Celsius bankruptcy estate’s next challenge will be substantiating the alleged liquidation mechanics and linking them to specific losses during the March 2020 crash. Market watchers should focus on how the court handles proof related to execution quality during stress periods and whether the alleged price discrepancies and timing around the March 13 disruptions are sufficient to support the estate’s fraud and market manipulation theories.