BitMEX is caught in fresh legal trouble as a class action lawsuit filed in the US claims traders lost a total of 622.66 Bitcoin through forced liquidations on the platform. The complaint, lodged in the Southern District of New York, accuses the exchange of operating a liquidation mechanism that disproportionately benefits itself while harming users’ holdings.
Allegations of Unfair Liquidation Mechanisms
The lawsuit, brought by BKX Services Inc. and trader David Namdar, asserts that BitMEX’s internal trading desk had access to sensitive customer data and continued trading even during periods when regular users experienced server freezes preventing them from managing their positions. BKX cites losses of 305.81 BTC, while Namdar claims over 316.85 BTC lost through these forced liquidations. The plaintiffs argue BitMEX’s liquidation engine automatically closed positions despite sufficient collateral remaining, funneling excess Bitcoin into the exchange’s insurance fund rather than returning it to traders.
Insurance Fund and Server Outages Under Scrutiny
BitMEX offered use up to 100x, which increased exposure but also the risks of liquidation. The complaint focuses on how the platform transferred remaining collateral to its insurance fund instead of refunding users, generating revenue at their expense. Server freezes reportedly blocked traders from closing or adjusting positions during volatile market movements, while BitMEX’s internal trading desk allegedly remained active, a claim that casts doubt on the exchange’s fairness and transparency.
This new lawsuit echoes earlier legal challenges from 2020, which were dismissed without prejudice in 2025 but brought similar accusations under the Commodity Exchange Act. The timing coincides with BitMEX’s recent announcement that it will cease operations on September 23 following a strategic review by owner HDR Global Trading.
