BitMEX is facing a proposed class action lawsuit alleging that its liquidation system allowed the cryptocurrency exchange to retain 622.66 Bitcoin from customer accounts. BKX Services Inc. and trader David Namdar filed the complaint in the U.S. District Court for the Southern District of New York. The legal action came on the same day BitMEX confirmed that its trading platform would close in September. The plaintiffs are seeking the return of the disputed Bitcoin, financial compensation, and punitive damages.
Plaintiffs Challenge BitMEX Liquidation System
BKX Services and Namdar claim they lost a combined 622.66 BTC through forced liquidations involving Bitcoin perpetual swap contracts. BKX alleges losses of at least 305.81 BTC, while Namdar says more than 316.85 BTC was taken from his account. The complaint seeks to represent eligible U.S. customers who traded the products from July 23, 2018.
According to the filing, BitMEX allowed customers to trade with leverage of up to 100 times their deposited collateral. The plaintiffs allege that the exchange closed some positions before traders had exhausted all available collateral. They claim the remaining Bitcoin exceeded the value of the losses recorded when the positions were liquidated.
The lawsuit alleges that excess collateral was moved into the exchange’s insurance fund instead of being returned to customers. It also claims that BitMEX generated revenue from the liquidation process. BitMEX had not provided a detailed public response to the specific allegations contained in the complaint at the time covered by the filing.
Internal Trading Operations Face Scrutiny
The plaintiffs also accuse an internal BitMEX trading desk of operating with access to non-public customer information. According to the complaint, the desk could monitor positions and continue trading during periods when regular customers could not access the platform. The allegations focus on server disruptions that reportedly prevented some users from reducing or closing positions.
The filing argues that these conditions gave the internal operation an advantage during periods of sharp market volatility. Customers allegedly remained exposed to liquidation while being unable to manage their trades. The plaintiffs claim the exchange benefited when those positions were closed and remaining collateral entered the insurance fund.
Similar accusations appeared in a class action filed in 2020 by trader Brett Messieh and other claimants. That case cited alleged violations of the Commodity Exchange Act. Court records referenced in the new complaint show that the earlier action was voluntarily dismissed without prejudice on June 30, 2025.
BitMEX Confirms September Exchange Closure
HDR Global Trading, the company that owns and operates BitMEX, announced that exchange services will end at 04:00 UTC on September 23. The operator said the decision followed a strategic review of its business and the wider digital asset market. New account registrations have already stopped.
From August 26, existing customers will no longer be able to open new positions. Traders will only be permitted to reduce current exposure as the exchange gradually closes outstanding contracts. Any positions still open at the final deadline will be liquidated automatically under the platform’s closure procedures.
BitMEX said contracts with limited liquidity may be settled before the shutdown date. Customers will receive advance notice where early settlement is required. Account access will remain available after trading stops, allowing users to withdraw funds and review balances and transaction records.
Restructuring Precedes BitMEX Shutdown
The closure follows several management changes at BitMEX. Stephan Lutz was replaced as chief executive, while chief financial officer Ina Steiner and chief growth officer Raphael Polansky also left the company. Former chief operating officer and global general counsel Peter Wilkinson later became chief executive.
Reports had also indicated that BitMEX was considering a possible sale, although no transaction was announced. The exchange has faced regulatory and leadership changes since 2020, when founders Arthur Hayes, Ben Delo and Samuel Reed stepped down following U.S. anti-money laundering charges.
BitMEX said its reserves remain above customer liabilities and referred users to its proof-of-reserves and liabilities records. The exchange also warned customers about phishing attempts linked to the shutdown and said it does not offer a priority withdrawal service. Funds left on the platform after closure will face a monthly charge of $50 or an annual fee of 1%, whichever is higher.
