BitMEX Accused of Secretly Trading Against Users in New Class Action Lawsuit

A new class action lawsuit has been filed against BitMEX and its founders, Arthur Hayes, Samuel Reed, and Ben Delo, just one day after the crypto derivatives exchange shut down. The plaintiffs, BKX Services and David Namdar, claim that BitMEX secretly traded against its own users through an internal trading desk, resulting in combined losses of 622.66 BTC (about $40.7 million).

The lawsuit alleges that BitMEX had privileged access to customer orders, including 'hidden orders,' giving insiders an unfair trading advantage. The plaintiffs claim that customers believed they were trading only against other market participants when, in reality, BitMEX was allegedly taking the opposite side of trades.

The complaint also revisits the March 13, 2020 market crash, claiming that around $800 million worth of leveraged positions were liquidated while many users were unable to access the exchange due to system outages. The plaintiffs argue that these events allowed BitMEX to generate 'ill-gotten gains' through trading fees, customer liquidations, and its growing Insurance Fund.