Crypto derivatives platform BitMEX is facing a proposed class action in the U.S. District Court for the Southern District of New York, where plaintiffs BKX Services Inc. and David Namdar allege they lost a combined 622.66 BTC through forced liquidations on the exchange. According to the complaint, BKX says it lost at least 305.81 BTC, while Namdar claims losses of more than 316.85 BTC.
The filing also alleges that BitMEX’s internal trading desk had access to private customer information and was able to keep trading during periods when servers were frozen or ordinary users could not access the platform or close positions. Plaintiffs further claim BitMEX let customers trade with leverage of up to 100x and automatically liquidated positions while collateral was still worth twice the amount of the loss, with remaining BTC directed into the platform’s insurance fund.
The plaintiffs are seeking the return of bitcoin they say was withheld, as well as compensatory and punitive damages. The proposed class would cover U.S. customers who purchased BTC swap products from July 23, 2018 onward. On the same day the lawsuit was filed, BitMEX said it would stop providing services on Sept. 23 after a strategic review by owner HDR Global Trading, had already stopped accepting new registrations, and planned to block users from opening new positions starting Aug. 26.
Crypto derivatives platform BitMEX is facing a proposed class action, with BKX Services Inc. and David Namdar filing a complaint in the U.S. District Court for the Southern District of New York, according to Odaily.
Plaintiffs claim 622.66 BTC in forced-liquidation losses
The plaintiffs say they lost a combined 622.66 BTC in forced liquidations on BitMEX. BKX alleges losses of at least 305.81 BTC, while Namdar claims losses of more than 316.85 BTC.
Complaint targets internal trading access and liquidation rules
The complaint alleges that BitMEX’s internal trading desk could access private customer information and continue trading during periods when servers were frozen or when ordinary users were unable to access the platform or liquidate positions.
Plaintiffs also allege that BitMEX allowed customers to use leverage of up to 100x and automatically liquidated positions while collateral was still worth twice the amount of the loss, with the remaining BTC going into the platform’s insurance fund.
Plaintiffs seek return of BTC and damages
The plaintiffs are seeking the return of bitcoin they say was withheld, along with compensatory and punitive damages. The proposed class would represent U.S. customers who bought BTC swap products starting on July 23, 2018.
BitMEX announced service shutdown the same day
On the same day the lawsuit was filed, BitMEX said it would cease providing services on Sept. 23 following a strategic review by its owner, HDR Global Trading. The platform said it had already stopped accepting new registrations and plans to bar users from opening new positions starting Aug. 26.
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