BitMEX Sued for $623M in Alleged Theft and Insider Trading

A proposed class-action lawsuit has been filed against BitMEX, alleging that its liquidation system was designed to take Bitcoin from customers and that an internal trading operation used confidential customer information.

The plaintiffs, BKX Services Inc. and trader David Namdar, claim they lost a combined 622.66 BTC through forced liquidations. They allege that BitMEX's liquidation engine closed certain trades while the remaining collateral was still worth more than the loss needed to be covered, transferring Bitcoin left after those liquidations into the exchange's insurance fund.

The complaint also describes an operation it calls the 'Insider Trading Desk', which allegedly had access to confidential information about customer positions and liquidation levels. This allowed internal trading accounts to remain active during server outages that prevented regular customers from logging in, modifying orders or closing positions.