Arthur Hayes is facing a proposed class action in the United States after two former BitMEX customers accused him and other company executives of running a secret trading operation that allegedly profited from user losses. BitMEX was once one of the largest crypto derivatives exchanges by trading volume, and its perpetual swap contracts were widely used by leveraged traders before regulatory pressure mounted against the platform.

The lawsuit centers on claims that BitMEX accessed confidential customer account information, traded against users, and manipulated liquidations for its own benefit. The allegations come as BitMEX prepares to permanently cease operations in September following a strategic review by HDR’s board.

The complaint was filed in the U.S. District Court for the Southern District of New York. In addition to Hayes, the case names BitMEX co-founders Samuel Reed and Benjamin Delo as defendants. Former head of business development Gregory Dwyer is also named, along with HDR Global Trading Limited and four affiliated entities.

According to the complaint, BitMEX operated an undisclosed “Insider Trading Desk” that had access to private customer account data. The plaintiffs allege that the desk used confidential trading information to open positions against customers without their knowledge.

The filing also claims BitMEX deliberately structured its liquidation system to close user positions earlier than necessary. After those forced liquidations, the plaintiffs allege, remaining customer collateral flowed into BitMEX’s Insurance Fund — a mechanism derivatives exchanges use to cover losses from bankrupt positions, but which the plaintiffs argue was enriched through improper liquidations.

Lawsuit alleges internal desk used customer information

The complaint alleges that Gregory Dwyer supervised the Insider Trading Desk from BitMEX’s Manhattan office throughout 2018. According to the filing, internal software identified market movements that could trigger the largest number of customer liquidations.

The plaintiffs further claim BitMEX told users that hidden orders and liquidation prices would remain confidential. However, they allege that the internal trading desk had unrestricted access to that information while ordinary customers did not.

The lawsuit also accuses BitMEX of influencing prices on third-party reference exchanges, allegedly causing liquidations across its derivatives platform.

A separate allegation focuses on March 13, 2020, when customers reportedly lost access to the exchange for about 25 minutes while nearly $800 million in leveraged positions were liquidated. The outage coincided with a period of extreme volatility across global crypto markets. BitMEX initially attributed the disruption to a cloud hardware issue and later cited distributed denial-of-service attacks. The plaintiffs reject those explanations and allege the platform intentionally prevented customers from managing open positions during the incident.

Plaintiffs seek return of bitcoin through proposed class action

BKX Services claims it lost about 305.8 BTC across 13 liquidations between July and August 2018. David Namdar alleges losses of roughly 316.9 BTC through 14 identified liquidations and at least 69 additional transactions between August 2019 and May 2020.

The lawsuit includes fraud and replevin claims. Rather than seeking only monetary damages, the plaintiffs are also asking for the return of bitcoin they allege BitMEX wrongfully obtained — a legal approach that, if successful, could entitle class members to the specific digital assets rather than a cash equivalent.

The plaintiffs estimate that the proposed class includes tens of thousands of U.S. customers and that the combined claims exceed $5 million.

The filing also cites a similar lawsuit brought in 2020, which ended in a voluntary dismissal without prejudice in June 2025. The plaintiffs now argue that the earlier litigation paused the statute of limitations, allowing the new claims to proceed.

BitMEX shutdown adds context to renewed legal challenge

BitMEX pleaded guilty in 2024 to violating the Bank Secrecy Act. The exchange received an additional $100 million fine in January 2025. Its co-founders, including Arthur Hayes, were later pardoned by current U.S. President Donald Trump in March 2025. The pardons addressed criminal convictions but do not shield the defendants from civil claims of the kind now being pursued.

Hayes now faces renewed legal pressure as former BitMEX customers seek class action status over allegations of insider trading, market manipulation, and wrongful liquidations.

BitMEX has separately confirmed that it will permanently cease operations on Sept. 23 after a strategic review by HDR’s board, bringing the lawsuit into focus during the exchange’s final weeks. The shutdown raises practical questions about asset recovery and the preservation of records that could be relevant to the litigation.