BitMEX Sued Over Alleged Collateral Seizure via Forced Liquidations
A class action lawsuit has been filed against BitMEX, accusing the cryptocurrency derivatives platform of fraudulently engineering customer liquidations to seize traders' Bitcoin collateral.
The complaint, which was filed in the US District Court for the Southern District of New York on Thursday by BKX Services Inc. and David Namdar, alleges that the plaintiffs lost a combined 622.66 BTC through forced liquidations on BitMEX.
The lawsuit revives long-running allegations about the platform's internal trading operations and liquidation engine and comes just as the exchange is preparing to close in September after announcing its shutdown.
'BitMEX deliberately developed a system that profited from the liquidations,' the plaintiffs alleged. The complaint claimed 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.