BitMEX Faces Class Action Lawsuit Over Alleged Mismanagement of Customer Liquidations

BitMEX, a popular cryptocurrency derivatives trading platform founded by Arthur Hayes, is facing a class action lawsuit in the United States. The lawsuit was filed on Thursday, coinciding with the company's announcement to cease its exchange activities permanently after 11 years.

The plaintiffs, BKX Services Inc. and David Namdar, allege that BitMEX has been mismanaging customer liquidations to profit from their losses. They claim that the platform has created a system to benefit from forced liquidations, allowing it to take control of customers' Bitcoin (BTC) collateral.

The lawsuit alleges that BitMEX allowed traders to trade with up to 100 times their collateral, leading to significant losses for customers. The plaintiffs also claim that the company moved excess BTC to its insurance fund and profited from forced liquidations.

The complaint seeks reimbursement of allegedly stolen Bitcoin and damages, including punitive measures. It also aims to represent US customers who have been involved in Bitcoin and crypto swapping deals since July 23, 2018.

BitMEX has denied the claims, stating that it will defend against the lawsuit. The company's spokesperson said, 'BitMEX has had many such claims against the platform in our history and has successfully dealt with each and every one.'