Cryptocurrency derivatives exchange BitMEX is facing a proposed class action lawsuit in the United States accusing the platform of engineering customer liquidations that allegedly enabled it to retain hundreds of Bitcoin before its planned shutdown in September.

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

The lawsuit was filed on the same day that HDR Global Trading, the owner and operator of BitMEX, confirmed it would wind down its exchange operations. The plaintiffs are seeking the return of 622.66 BTC along with compensatory and punitive damages on behalf of eligible U.S. traders.

Allegations of Systemic Liquidation Advantage

According to the complaint, BitMEX offered leveraged trading of up to 100 times customers' collateral but allegedly liquidated positions before all available collateral had been exhausted. The filing claims customers frequently lost their positions while the remaining Bitcoin collateral was still worth substantially more than the trading losses.

The plaintiffs allege the excess Bitcoin was transferred into BitMEX's insurance fund rather than being returned to users, enabling the exchange to benefit financially from forced liquidations. Insurance funds are commonly maintained by crypto derivatives exchanges to cover counterparty losses when traders' accounts go negative, but the lawsuit contends BitMEX used liquidation mechanics to grow the fund beyond its intended purpose. They further claim an internal trading desk had access to non-public customer information and was able to continue trading during server outages that prevented ordinary users from managing or closing their own positions.

"BitMEX deliberately developed a system that profited from the liquidations," the plaintiffs alleged in the complaint.

The proposed class action seeks to represent U.S. customers who traded Bitcoin perpetual swap products in transactions dating back to July 23, 2018.

The filing also references an earlier class action brought in 2020 by Brett Messieh and other traders, who made similar allegations under the Commodity Exchange Act. Court records cited in the complaint indicate that case was voluntarily dismissed without prejudice on June 30, 2025, allowing similar claims to be refiled.

BitMEX Announces Exchange Closure

The legal action comes as BitMEX prepares to end more than a decade of exchange operations. HDR Global Trading announced earlier on Thursday that it had decided to close the cryptocurrency derivatives platform following a strategic review of both the business and the broader digital asset industry. Exchange operations will end at 04:00 UTC on Sept. 23.

BitMEX has already stopped accepting new account registrations. Beginning Aug. 26, traders will no longer be able to open new positions and will only be permitted to reduce existing ones. During the weeks leading up to the closure, the exchange said it will progressively close outstanding positions, and any remaining open positions at the final deadline will be liquidated automatically. Contracts with limited liquidity may be settled early under existing settlement procedures, with advance notice provided to affected users.

Although trading services will end in September, BitMEX said customers will retain access to their accounts for withdrawals and to review wallet balances and transaction history. Users who leave funds on the platform after the shutdown will be charged the equivalent of $50 per month or 1% annually, whichever is higher, with fees deducted monthly from verified accounts.

BitMEX warned customers to remain alert for phishing campaigns seeking to exploit news of the shutdown. The company stated that no priority withdrawal service exists and cautioned users against anyone claiming to accelerate withdrawals. It also noted that increased withdrawal requests and Bitcoin network confirmation times could occasionally delay processing during the wind-down period.

Separately, BitMEX said its reserves remain higher than customer liabilities and directed users to its proof of reserves and liabilities data as evidence that customer assets remain fully backed.

Leadership Restructuring Precedes Closure

The closure follows several months of internal changes at the exchange. Earlier in July, BitMEX replaced chief executive Stephan Lutz as part of a management restructuring that also saw chief financial officer Ina Steiner and chief growth officer Raphael Polansky depart. Former chief operating officer and global general counsel Peter Wilkinson was subsequently appointed chief executive.

The leadership overhaul came amid reports that the exchange had been exploring a potential sale. BitMEX has not announced a transaction since those reports emerged.

The company has undergone multiple executive changes since 2020, when founders Arthur Hayes, Ben Delo, and Samuel Reed stepped down after U.S. authorities accused the exchange of failing to implement adequate anti-money laundering controls. The charges, brought by the U.S. Department of Justice and the Commodity Futures Trading Commission, alleged violations of the Bank Secrecy Act and accused BitMEX of operating an unregistered trading platform. BitMEX later pleaded guilty and agreed to pay up to $100 million in civil penalties. Hayes and other executives also pleaded guilty to related charges and received sentences of home confinement and probation.

Founded in 2014, BitMEX became one of the earliest cryptocurrency derivatives exchanges and introduced the 100x leveraged perpetual swap, a product that was subsequently widely adopted across the industry. At its peak in 2018, BitMEX was among the highest-volume crypto trading platforms in the world, but its market share declined sharply as competitors including Binance, Bybit, and OKX expanded their own derivatives offerings. In announcing its closure, the company said it had operated for more than 11 years without losing customer funds to hacks and thanked users for supporting the platform throughout its history.

The exchange's shutdown announcement was followed by a sharp decline in its BMEX utility token, which fell by roughly 90% after the closure plans became public.