[Update 07:24 UTC, July 24: Adds BitMEX response in fifth paragraph.]

BitMEX, once among the largest cryptocurrency derivatives exchanges by trading volume and the platform credited with popularizing the perpetual swap contract that became a staple of crypto trading, is facing a proposed class action lawsuit alleging that it fraudulently engineered customer liquidations to seize traders' Bitcoin collateral.

On Thursday, BKX Services Inc. and David Namdar filed the complaint in the US District Court for the Southern District of New York. The plaintiffs allege they lost a combined 622.66 BTC through forced liquidations on BitMEX. BKX Services claims losses of at least 305.81 BTC, while Namdar alleges losses exceeding 316.85 BTC.

The lawsuit revives longstanding allegations regarding the platform's internal trading operations and liquidation engine. It arrives just as the exchange prepares to cease operations in September.

"BitMEX deliberately developed a system that profited from the liquidations," the plaintiffs alleged. The complaint contends that an internal trading desk had access to private customer information and was able to continue trading during server freezes that prevented ordinary users from accessing or closing their positions.

"BitMEX has had many such claims against the platform in our history and has successfully dealt with each and every one," a BitMEX spokesperson told Cointelegraph. "This is yet another opportunistic claim with no basis; we look forward to vigorously defending ourselves again this time."

Plaintiffs Seek Return of Bitcoin Under Fraud Claims

According to the filing, BitMEX permitted customers to use leverage of up to 100 times their collateral, then automatically liquidated positions while the collateral was still allegedly worth twice the amount of the losses incurred. The remaining BTC was transferred into the platform's insurance fund, enabling BitMEX to profit from forced liquidations, the plaintiffs claim.

The plaintiffs are seeking the return of the allegedly withheld Bitcoin as well as compensatory and punitive damages. They aim to represent US customers who purchased BTC swap products in transactions dating back to July 23, 2018.

The complaint also referenced a prior class action filed in 2020 by Brett Messieh and other traders alleging similar conduct. That case, which brought claims under the Commodity Exchange Act, was voluntarily dismissed without prejudice on June 30, 2025. The year 2020 also marked the start of separate US legal action against BitMEX, when the Department of Justice and the CFTC brought charges against the exchange and its founders over Bank Secrecy Act and anti-money-laundering compliance failures.

Lawsuit Filed on Same Day as Shutdown Announcement

The proposed class action was filed on the same day BitMEX announced it would close after 11 years of operation. BitMEX stated it would stop providing services on September 23 following a strategic review by its owner, HDR Global Trading.

The exchange has already stopped accepting new registrations and plans to prevent users from opening new positions starting August 26. The shutdown announcement was followed by a roughly 90% decline in the price of BitMEX's BMEX utility token. The closure comes after years of declining market share, as competitors such as Binance and Bybit expanded their crypto derivatives offerings and captured volume that BitMEX once dominated.