BitMEX is facing a class action lawsuit filed Thursday in the US District Court for the Southern District of New York. BKX Services Inc. and trader David Namdar accuse the crypto derivatives exchange of manipulating customer liquidations and withholding Bitcoin collateral.
According to the complaint, the plaintiffs lost a combined 622.66 BTC due to forced liquidations on BitMEX, with BKX alleging a loss of 305.81 BTC and Namdar over 316.85 BTC. They seek the return of these Bitcoins alongside compensatory and punitive damages.
Allegations of Manipulative Liquidation Mechanisms
The lawsuit claims BitMEX engineered its liquidation system to benefit the exchange financially by triggering forced liquidations even when traders’ collateral remained sufficient. Plaintiffs say an internal trading desk had access to private customer data and could trade during platform downtime that locked out regular users.
BitMEX's use of up to 100x on derivatives trading is a known risk factor. The suit alleges excess collateral from liquidations was funneled into BitMEX's insurance fund instead of being returned to traders, allowing the exchange to profit from customer losses.
This legal action revives claims similar to those in a 2020 lawsuit under the Commodity Exchange Act, which was dismissed in June 2025 without prejudice. The timing of this filing coincides with BitMEX's announcement to cease operations on September 23, 11 years after its launch.
BitMEX has halted new user registrations and will block opening new positions starting August 26. The exchange's BMEX token plunged about 90% following the closure news. BitMEX has not yet responded to the fraud allegations publicly.
