BitMEX Class Action Lawsuit Filed Amid Exchange Shutdown
BitMEX is facing a class action lawsuit accusing the crypto derivatives platform of fraudulently engineering customer liquidations to seize traders' Bitcoin collateral. The complaint, filed by BKX Services Inc. and David Namdar in the US District Court for the Southern District of New York, alleges that BitMEX allowed customers to use leverage of up to 100 times their collateral, then automatically liquidated positions while collateral was still worth twice the losses incurred.
The plaintiffs claim that an internal trading desk had access to private customer information and could continue trading during server freezes that prevented ordinary users from accessing or closing their positions. This allowed BitMEX to profit from forced liquidations, according to the complaint.
The lawsuit seeks the return of allegedly withheld Bitcoin as well as compensatory and punitive damages for US customers who purchased BTC swap products in transactions dating back to July 23, 2018. The plaintiffs aim to represent these customers, who lost a combined 622.66 BTC through forced liquidations on BitMEX.