BitMEX sued over alleged customer Bitcoin liquidation profits before September shutdown
BitMEX has been hit with a proposed class action in the US, accusing the derivatives exchange of engineering customer Bitcoin liquidations to retain value before its September closure. The case was filed in the U.S. District Court for the Southern District of New York by BKX Services Inc. and trader David Namdar.
The plaintiffs claim combined losses of 622.66 BTC from forced liquidations, alleging BitMEX liquidated positions while excess collateral still remained. They say the remaining Bitcoin was diverted to an insurance fund rather than returned to users, and that an internal trading desk allegedly had access to non-public customer information and could continue trading during outages.
The lawsuit seeks repayment of the alleged 622.66 BTC plus compensatory and punitive damages. It also attempts to include US customers trading Bitcoin perpetual swap products dating back to July 23, 2018.
BitMEX confirmed it will shut down: it stops new registrations immediately, ends new position openings Aug. 26, and plans to end trading operations at 04:00 UTC on Sept. 23. Customers can withdraw after shutdown, but assets left on the platform may incur fees (up to $50/month or 1% annually, whichever is higher).
This BitMEX lawsuit comes as earlier similar claims were dismissed without prejudice in 2025, and the company continues to highlight that reserves exceed customer liabilities via proof-of-reserves data. BitMEX has also warned users about phishing risks tied to the shutdown.
Bearish
This is likely bearish for near-term trading sentiment because a BitMEX lawsuit tied to customer liquidations raises credibility and operational-risk questions right as the exchange winds down. Similar disputes around liquidation systems can trigger sudden volatility, widen spreads, and increase risk-off positioning, especially among traders using leveraged products.
In the short term, the September shutdown timeline may already be driving positioning changes; adding allegations of unfair liquidation mechanics can further accelerate deleveraging and cautious margin management. The requested focus on up to 622.66 BTC also keeps attention on BitMEX’s settlement and withdrawal processes.
In the longer term, outcomes may be mixed. Proof-of-reserves messaging and the company’s stated reserve coverage can limit panic, but prolonged legal uncertainty can still weigh on derivatives market confidence and potentially reduce liquidity for similar venues. Historically, when large exchanges face regulatory or litigation scrutiny alongside shutdown plans, liquidity often thins temporarily, and volatility tends to remain elevated until clarity (settlement or court decisions) emerges.