BitMEX Accused of Profiting from Customer Liquidations Before Shutdown

BitMEX is facing a proposed class action lawsuit in the United States, alleging that it engineered customer liquidations to retain hundreds of Bitcoin. The plaintiffs are seeking the return of 622.66 BTC and compensatory and punitive damages on behalf of eligible US traders.

The lawsuit was filed on the same day BitMEX confirmed it will shut down its exchange operations in September. Court filings show that BKX Services Inc. and trader David Namdar filed the complaint, alleging they lost a combined 622.66 BTC through forced liquidations on BitMEX.

BitMEX allegedly offered leveraged trading of up to 100 times customers' collateral but liquidated positions before all available collateral had been exhausted. The plaintiffs claim that excess Bitcoin was transferred into BitMEX's insurance fund instead of being returned to users, allowing the exchange to benefit financially from forced liquidations.

The lawsuit alleges that an internal trading desk had access to non-public customer information and was able to continue trading during server outages that prevented ordinary users from managing or closing their own positions. The plaintiffs seek return of the allegedly withheld Bitcoin, as well as compensatory and punitive damages.