BitMEX is facing a proposed class action lawsuit that accuses the crypto derivatives exchange of fraudulently structuring customer liquidations and retaining traders’ Bitcoin collateral. BKX Services Inc. and trader David Namdar filed the complaint on Thursday in the US District Court for the Southern District of New York, according to Pacer.

The case is at the complaint stage, meaning the plaintiffs’ allegations have not been proven in court and the proposed class has not yet been certified. The plaintiffs allege that they lost a combined 622.66 Bitcoin through forced liquidations on the BitMEX platform. BKX claims it lost at least 305.81 BTC, while Namdar alleges losses of more than 316.85 BTC. They are seeking the return of the allegedly withheld Bitcoin, as well as compensatory and punitive damages.

According to the complaint, BitMEX intentionally designed its liquidation system to generate profits for the exchange. The lawsuit alleges that an internal trading desk had access to confidential customer information and was able to continue trading during periods when regular users could not access the platform.

The plaintiffs also claim that server freezes stopped customers from closing or adjusting their positions, while BitMEX’s internal trading operation remained active.

Plaintiffs Dispute BitMEX Liquidation Practices

BitMEX allowed customers to trade derivatives with leverage of up to 100 times the value of their collateral. High-leverage crypto derivatives can be liquidated quickly during volatile price moves, making the design and operation of an exchange’s liquidation engine central to how losses, collateral, and insurance funds are handled.

The lawsuit alleges that the platform automatically liquidated positions even when the remaining collateral was still worth more than the losses incurred.

The excess Bitcoin was allegedly moved into BitMEX’s insurance fund rather than returned to affected traders. The plaintiffs argue that this structure enabled BitMEX to benefit financially from forced liquidations.

The new filing renews long-running allegations related to BitMEX’s liquidation engine and internal trading activities. A separate class action filed in 2020 by Brett Messieh and other traders made similar claims under the Commodity Exchange Act. That case was voluntarily dismissed without prejudice in June 2025.

Filing Comes as BitMEX Prepares to Shut Down

The lawsuit was filed on the same day BitMEX announced that it would close after 11 years of operation. The exchange said it would stop providing services on Sept. 23 following a strategic review by owner HDR Global Trading. BitMEX has already stopped accepting new customer registrations and plans to prevent users from opening new positions from Aug. 26.

BitMEX announced the shutdown on X at https://x.com/BitMEX/status/2080201602456301580.

The closure announcement also coincided with a sharp decline in the exchange’s BMEX utility token, which reportedly fell by approximately 90%.

BitMEX has not publicly responded to the allegations. The next procedural steps would typically determine whether the defendants respond with an answer or seek dismissal, and whether the plaintiffs can move toward class certification.