BitMEX Sued for Alleged Market Manipulation in 2020
The Celsius bankruptcy estate has filed a lawsuit against five BitMEX-linked companies in the US Bankruptcy Court for the Southern District of New York. The complaint, which was filed on Sept. 12, alleges fraud, market manipulation and wrongful liquidations during the March 2020 market crash.
The defendants include HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings and HDR Global Services. The estate claims that BitMEX wrongfully liquidated and seized 1,325.84 BTC in collateral from Celsius on March 12, 2020, and 5,034.33 BTC from investment fund JST the following day.
The lawsuit seeks the recovery of Bitcoin worth nearly $490 million at the time of writing. The complaint alleges that BitMEX controlled the prices used to trigger liquidations and intensified the sell-off in March 2020. It also claims that some liquidation sell orders were placed at prices more than 24% below the next-best ask available on the platform.
The estate cites the timing of BitMEX's service disruption on March 13, 2020, as evidence for its claim that the exchange's liquidation engine intensified the sell-off. It alleges that liquidation orders stopped when the platform became unavailable, and Bitcoin's price then recovered, indicating that forced selling on BitMEX had been suppressing the price.