BitMEX Hit With 623 BTC Lawsuit After Announcing Shutdown

BKX Services Inc. and David Namdar have filed a class action lawsuit against BitMEX, alleging market manipulation and misappropriation of nearly 623 Bitcoin (BTC) through forced liquidations. The lawsuit was filed on the same day the exchange announced its shutdown.

The plaintiffs claim that BitMEX’s internal trading team accessed customers’ private information and continued trading while servers were down, preventing users from accessing the platform. They also accuse the exchange of liquidating leveraged positions before all collateral was exhausted, leading to losses for traders while BitMEX redirected excess BTC to its insurance pool. According to the filing, “BitMEX deliberately developed a system that profited from the liquidations.”

The lawsuit cites a similar 2020 case where traders accused BitMEX of rigging trading conditions, though that case was dismissed for lack of evidence. Namdar claims to have lost 316.85 BTC, and BKX reports losses of 305.81 BTC. The proposed class action seeks to represent U.S. customers who traded Bitcoin perpetual swaps dating back to July 23, 2018.

Earlier on Thursday, BitMEX owner HDR Global Trading announced the exchange would shut down, effective September 23. New account registrations have been suspended, and traders can only close existing positions. BitMEX co-founder Arthur Hayes thanked partners, employees, and customers, saying, “It was an amazing ride,” and expressed pride in shutting down “responsibly on our own terms.”

Source: https://cryptopotato.com/bitmex-hit-with-623-btc-lawsuit-after-announcing-shutdown/