BitMEX is facing a proposed class action lawsuit in the United States that claims the cryptocurrency derivatives exchange engineered customer liquidations to generate profit, just hours after it announced plans to shut down its trading platform in September.
Court documents filed in the U.S. District Court for the Southern District of New York show that BKX Services Inc. and trader David Namdar lodged the complaint on Thursday, alleging they collectively lost 622.66 BTC through forced liquidations on BitMEX. According to the filing, BKX claims losses of at least 305.81 BTC, while Namdar alleges more than 316.85 BTC was wiped out from his positions.
The case has been brought as a proposed class action and seeks to represent U.S.-based customers who traded Bitcoin perpetual swap products on BitMEX in transactions dating back to 23 July 2018. Alongside the return of the Bitcoin they say was improperly retained, the plaintiffs are also pursuing compensatory and punitive damages.
Claims over liquidation system and insurance fund
At the centre of the complaint are long-standing allegations about how BitMEX’s liquidation engine and insurance fund operated during periods of market stress.
The lawsuit states that BitMEX allowed trading with leverage of up to 100 times a customer’s collateral. However, the plaintiffs claim the exchange liquidated positions before all available collateral had been used, even when the remaining Bitcoin posted as margin was still worth significantly more than the customer’s trading losses.
According to the filing, the excess collateral from those forced liquidations was not returned to users but instead diverted into BitMEX’s insurance fund, which was designed to cover losses when liquidations could not be executed at bankruptcy price. The plaintiffs argue this structure meant BitMEX benefited directly from liquidations at the expense of its own customers.
The lawsuit also alleges that BitMEX operated an internal trading desk with access to non-public customer information. The plaintiffs say this desk was able to continue trading during periods when server outages left ordinary users unable to adjust or close their positions.
“BitMEX deliberately developed a system that profited from the liquidations,” the complaint states.
Earlier legal action cited
The filing refers to a previous class action brought in 2020 by Brett Messieh and other traders, who made similar accusations under the Commodity Exchange Act. Court records cited in the new complaint show that case was voluntarily dismissed without prejudice on 30 June 2025, leaving the door open for comparable claims to be filed again.
The latest lawsuit was submitted on the same day BitMEX confirmed it would wind down its core exchange operations, reviving scrutiny over practices that critics have highlighted for several years.
Exchange sets out shutdown timetable
Earlier on Thursday, HDR Global Trading, which owns and operates BitMEX, announced that it will close the cryptocurrency derivatives platform following what it described as a strategic review of both the business and the wider digital asset sector. The company said exchange operations will cease at 04:00 UTC on 23 September.
BitMEX has already halted new account registrations. From 26 August, customers will no longer be able to open fresh positions and will only be allowed to reduce existing ones. The exchange has said it will progressively close open positions in the run-up to the final deadline, with any remaining positions at shutdown automatically liquidated.
The company added that contracts with limited liquidity may be settled ahead of schedule under its existing procedures, with advance notice to be given to affected users where required.
Trading will stop in September, but BitMEX says customers will still be able to log in to withdraw funds and review wallet balances and transaction histories. Users who leave assets on the platform after the shutdown will face ongoing charges, set at either the equivalent of $50 per month or 1% per year, whichever is higher, with fees deducted monthly from verified accounts.
BitMEX has also cautioned customers about potential phishing campaigns seeking to exploit the closure announcement. The firm stressed there is no such thing as a priority withdrawal service and urged users to ignore anyone claiming they can accelerate withdrawals. It warned that increased demand for withdrawals, together with Bitcoin network confirmation times, could occasionally slow down processing during the wind-down.
In a separate statement, the exchange said its reserves remain higher than customer liabilities and directed users to its proof of reserves and liabilities disclosures as evidence that client assets are fully backed.
Management overhaul and strategic review
The decision to close the exchange comes after months of internal change at BitMEX.
Earlier in July, BitMEX replaced chief executive Stephan Lutz as part of a management reshuffle that also saw chief financial officer Ina Steiner and chief growth officer Raphael Polansky leave the company. Former chief operating officer and global general counsel Peter Wilkinson was subsequently promoted to chief executive.
That leadership revamp followed reports that BitMEX had been exploring a possible sale of the business, although the company has not announced any transaction since those reports surfaced.
The latest changes extend a period of turnover at the top that began in 2020, when founders Arthur Hayes, Ben Delo and Samuel Reed stepped down after U.S. authorities accused the exchange of failing to implement adequate anti-money laundering controls. BitMEX later pleaded guilty to those charges.
Alexander Hoptner was appointed chief executive in 2021, before Lutz took over in 2022 during a downturn in the cryptocurrency market.
One of the earliest crypto derivatives platforms
Founded in 2014, BitMEX was among the first cryptocurrency derivatives exchanges and is widely known for introducing the 100x leveraged perpetual swap, a product that later became standard across much of the industry.
In announcing its closure, the company noted that it had run for more than 11 years without losing customer funds to hacks and thanked users for supporting the platform over that period.
News of the shutdown was followed by a steep fall in the price of its BMEX utility token, which dropped by around 90% after the plans became public.
