BitMEX Accused of Profiting from Customer Losses Through Designed Trading Platform

BitMEX, one of the world's largest cryptocurrency exchanges, has been accused of deliberately designing its trading platform to force customer liquidations and seize their Bitcoin. The allegations come from a proposed class-action lawsuit filed in the U.S. District Court for the Southern District of New York by plaintiffs BKX Services Inc. and David Namdar.

The complaint alleges that BitMEX offered customers leverage of up to 100 times their collateral, then liquidated positions before all collateral had been exhausted. Instead of returning the remaining Bitcoin to customers, the exchange allegedly transferred those assets into a BitMEX-controlled insurance fund.

Namdar and BKX claim they lost a combined 622.66 Bitcoin, worth approximately $40.7 million at the time of the suit's filing, through what they describe as fraudulent liquidation practices. The lawsuit seeks the return of the allegedly seized Bitcoin, compensatory and punitive damages, and class-action status for U.S. customers who traded BitMEX Bitcoin swap products beginning July 23, 2018.