BitMEX Hit with 623 BTC Lawsuit Amid Shutdown Plans

A class action lawsuit has been filed against BitMEX, accusing the platform of fraudulently engineering customer liquidations to seize traders' Bitcoin collateral. The plaintiffs, BKX Services Inc. and David Namdar, claim they lost a combined 622.66 BTC through forced liquidations on BitMEX. This alleged scheme involved an internal trading desk that had access to private customer information and could continue trading during server freezes.

The lawsuit 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 remaining BTC was placed into the platform's insurance fund, allowing BitMEX to profit from forced liquidations.

BitMEX announced its shutdown earlier this week, citing a strategic review by its owner, HDR Global Trading. However, this lawsuit revives long-running allegations about the platform's internal trading operations and liquidation engine.