BitMEX Sued Over Alleged Server Freezes and Internal Trading to Seize 622 Bitcoin
BitMEX Customers Seek Return of 622 Bitcoin, Allege Exchange Engineered Liquidations
BitMEX customers have filed a proposed class-action lawsuit seeking the return of 622.66 BTC, accusing the crypto exchange of engineering liquidations and unlawfully retaining traders’ collateral.
The lawsuit, filed on July 23 in the US District Court for the Southern District of New York, comes as BitMEX begins its regulator-approved wind-down ahead of its planned shutdown in September.
One plaintiff, BKX Services Inc., claims it lost 305.809 BTC through liquidations in 2018, while David Namdar alleges losses of 316.856 BTC between 2019 and 2020. Rather than seeking monetary damages, both plaintiffs are asking the court to order the return of the Bitcoin itself.
The lawsuit names BitMEX operator HDR Global Trading Limited, along with four affiliated companies: ABS Global Trading Limited, 100x Holdings Limited, Shine Effort Inc Limited, and HDR Global Services (Bermuda) Limited. BitMEX co-founders Arthur Hayes, Samuel Reed, Benjamin Delo, and Gregory Dwyer are also listed as defendants.
According to the complaint, BitMEX’s liquidation engine automatically closed traders’ positions once unrealized losses reached roughly half of the collateral they had posted. The plaintiffs argue that any remaining collateral should have been returned to customers, but instead was allegedly transferred to BitMEX’s Insurance Fund.
The lawsuit also claims BitMEX operated an undisclosed internal trading desk that had access to customer positions, hidden orders, and liquidation levels. The plaintiffs allege the desk continued trading during server outages that prevented regular users from accessing the platform and traded on reference exchanges to influence prices and trigger customer liquidations. However, these allegations have not been proven in court.
BitMEX CEO Peter Wilkinson dismissed the lawsuit, calling it “spurious and opportunistic” in comments to Benzinga. He said the company intends to defend itself vigorously.
The case revives allegations similar to those raised in a 2020 class-action lawsuit under the Commodity Exchange Act, which was voluntarily dismissed without prejudice in June 2025. The new lawsuit instead focuses on claims of replevin (wrongful retention of property) and fraud, arguing that the earlier case paused the applicable statute of limitations.
Separately, the Financial Services Authority of Seychelles (FSA) confirmed that HDR withdrew its virtual asset service provider license application on July 23. Under the regulator-approved wind-down plan, BitMEX is permitted only to close open positions, return client-held assets, and complete its shutdown before exchange services officially end on September 23.
BitMEX has stated that customers will still be able to access their accounts to view balances and withdraw funds after that date. The company also says its assets exceed its liabilities.
However, the wind-down plan does not specifically address the disputed Bitcoin tied to historical liquidations. As a result, the plaintiffs argue that resolving ownership of the 622.66 BTC has become increasingly urgent, even though the exchange’s closure does not affect the legal proceedings or determine whether the Bitcoin can ultimately be recovered.
