TL;DR
- BitMEX faces a proposed class action from BKX Services and David Namdar, who allege combined losses of 622.66 BTC worth about $40.7 million.
- The complaint claims forced liquidations retained customer collateral and that an internal desk traded during server freezes using privileged access to information.
- BitMEX plans to stop services on September 23, after ending registrations and scheduling a ban on new positions from August 26, while denying the allegations.
BitMEX is preparing to end an 11-year run as a cryptocurrency derivatives exchange, but its shutdown announcement has been eclipsed by a proposed class action alleging theft, insider trading, and deliberately abusive liquidations. BKX Services and David Namdar filed the complaint in the U.S. District Court for the Southern District of New York, claiming combined losses of 622.66 BTC, valued at about $40.7 million. The exchange’s planned closure now unfolds beside accusations that its liquidation system was engineered to retain customer collateral, creating a striking collision between operational retreat and unresolved legal scrutiny in court.
Liquidation allegations collide with BitMEX’s final months
The plaintiffs allege BitMEX allowed leverage of up to 100 times collateral, then closed positions while the remaining collateral was still worth roughly twice the losses incurred. According to the complaint, that leftover bitcoin was transferred into the platform’s insurance fund instead of being returned to customers. The lawsuit argues that forced liquidations became a profit mechanism rather than a neutral risk-control process. BKX claims losses of at least 305.81 BTC, while Namdar alleges more than 316.85 BTC, and both seek the return of bitcoin alongside compensatory and punitive damages in the current proposed action.
The complaint also claims an internal trading desk accessed private customer information and continued operating during server freezes that prevented ordinary users from closing positions. BitMEX rejected the allegations, calling the case opportunistic and without basis, and said it would defend itself vigorously. At the center of the dispute is whether privileged access created an uneven market during moments of extreme vulnerability. The proposed class would cover U.S. customers who purchased bitcoin swap products in transactions dating from July 23, 2018, although a judge must first approve class-action status before the litigation can proceed further.
The lawsuit arrived the same day BitMEX announced it would stop providing services on September 23 following a strategic review by parent company HDR Global Trading. New registrations have already ended, and users will be prevented from opening new positions beginning August 26. The timing transforms what might have been a controlled shutdown into a final reckoning over the exchange’s legacy. Similar allegations appeared in a 2020 case that was voluntarily dismissed without prejudice in June 2025, leaving the new plaintiffs to revive questions that never received a ruling on the underlying liquidation claims again.
