Just days before beginning its planned shutdown, crypto derivatives exchange BitMEX has been hit with a proposed class action lawsuit alleging that it manipulated its liquidation system to profit at the expense of customers.
Filed in the US District Court for the Southern District of New York, the lawsuit claims BitMEX deliberately designed its trading infrastructure to trigger unnecessary liquidations, allowing the platform to seize users’ Bitcoin collateral.
The complaint was brought by BKX Services Inc. and David Namdar, who say they collectively lost more than 622 BTC through forced liquidations. BKX alleges losses of at least 305.81 BTC, while Namdar claims to have lost over 316.85 BTC.
According to the plaintiffs, BitMEX granted an internal trading desk privileged access to sensitive customer data and allowed it to continue operating even during periods when the exchange’s servers allegedly froze, preventing regular users from managing or closing their positions. The lawsuit argues this created an unfair trading environment that consistently favored the exchange over its customers.
The complaint further alleges that BitMEX’s liquidation engine was structured to liquidate highly leveraged positions even when traders’ remaining collateral still exceeded their actual losses. Rather than returning the leftover Bitcoin to customers, the exchange allegedly transferred the excess funds into its insurance fund, creating an additional source of revenue from liquidated accounts.
The plaintiffs are seeking the return of the Bitcoin they claim was wrongfully retained, along with compensatory and punitive damages. They also hope to represent other US-based BitMEX users who traded Bitcoin perpetual swap products dating back to July 23, 2018.
BitMEX rejected the allegations, saying it has faced similar claims in the past and successfully defended itself. A company spokesperson described the lawsuit as another “opportunistic claim” without merit and said the exchange intends to contest the case in court.
The legal action also revives accusations first raised several years ago. The filing references a separate class action launched in 2020, which alleged comparable misconduct under the Commodity Exchange Act. That case was ultimately dismissed without prejudice in June 2025, leaving the underlying allegations unresolved.
The lawsuit arrives at a particularly difficult moment for BitMEX. On the same day the complaint was filed, the exchange announced it would permanently cease operations after more than a decade in business. Following a strategic review by owner HDR Global Trading, BitMEX said it will stop providing services on Sept. 23, while new user registrations have already been suspended and new trading positions will no longer be accepted starting Aug. 26.
Investor sentiment also deteriorated rapidly after the announcement, with BitMEX’s native BMEX token losing roughly 90% of its value, adding further pressure to the exchange as it prepares to exit the market.
