BitMEX faces 623 BTC fraud suit on day of closure announcement
A proposed class action seeking the return of 623 Bitcoin alleges BitMEX defrauded traders, striking the crypto exchange on the exact day it announced a permanent shutdown that tanked its native token.
BKX Services Inc. and David Namdar filed a proposed class action in the US District Court for the Southern District of New York on Thursday. The complaint accuses the crypto derivatives platform of fraudulently engineering customer liquidations to seize Bitcoin collateral. The plaintiffs claim to have lost a combined 622.66 BTC, with BKX alleging losses of at least 305.81 BTC and Namdar claiming losses exceeding 316.85 BTC.
The complaint targets BitMEX’s internal trading operations and liquidation mechanics. “BitMEX deliberately developed a system that profited from the liquidations,” the plaintiffs alleged. The filing contends that an internal trading desk possessed private customer data and could execute trades during server freezes, while ordinary users were locked out of their positions.
At the center of the dispute is the aggressive leverage BitMEX offered its users. According to the court documents, customers could leverage positions up to 100 times their collateral. The plaintiffs argue the exchange then triggered automatic liquidations while the collateral was still allegedly worth twice the actual losses incurred. The residual Bitcoin was subsequently absorbed into BitMEX’s insurance fund, directly profiting the platform.
The lawsuit lands on the exact day BitMEX announced it will close after 11 years of operation. Following a strategic review by owner HDR Global Trading, the exchange stated it will stop providing services on Sept. 23. BitMEX has already stopped accepting new registrations and will prevent users from opening new positions beginning on Aug. 26. The market reaction was immediate, with the BMEX utility token plunging roughly 90%.
The plaintiffs are seeking the return of the allegedly withheld Bitcoin alongside compensatory and punitive damages. They are pushing to represent US customers who purchased BTC swap products dating back to July 23, 2018. This effort revives claims from a 2020 class action filed by Brett Messieh and other traders under the Commodity Exchange Act. That prior case was voluntarily dismissed without prejudice on June 30, 2025, leaving the door open for Thursday's filing. BitMEX did not respond to requests for comment.
For market participants, the overlapping timing of a major fraud suit and an operational shutdown introduces significant uncertainty. Traders still holding positions on the exchange face a compressed timeline to exit before trading halts in late August, all while the legal framework governing the return of customer funds remains contested.
