BitMEX is facing a new legal challenge as the exchange prepares to shut down on Sept. 23. According to Benzinga, a class action complaint was filed on July 23 in the U.S. District Court for the Southern District of New York, accusing BitMEX of secretly operating an “Insider Trading Desk” that traded directly against its own users. The suit was brought by BKX Services Inc. and David Namdar on behalf of a group of BitMEX customers.
The complaint names HDR Global Trading Limited, co-founders Arthur Hayes, Ben Delo and Samuel Reed, as well as former executive Gregory Dwyer. Plaintiffs argue that BitMEX publicly presented itself as a neutral platform while privately running a desk that could view customer orders ahead of time, including hidden orders, giving insiders an unfair edge unavailable to ordinary users.
Plaintiffs claim the alleged conduct caused losses of about 622.66 BTC, or roughly $40.7 million. They are asking the court to certify the case as a class action, order the return of users’ bitcoin, and award compensatory damages, punitive damages, attorneys’ fees, litigation costs and interest. BitMEX’s CEO called the lawsuit “baseless and opportunistic.”
BitMEX is facing another lawsuit as the exchange moves toward its planned shutdown on Sept. 23. According to Benzinga, a class action complaint was filed on July 23 in the U.S. District Court for the Southern District of New York, alleging that the platform secretly ran an “Insider Trading Desk” that traded against its own customers.
Complaint targets BitMEX, founders and former executive
The lawsuit was brought by BKX Services Inc. and David Namdar on behalf of a group of BitMEX users. The defendants named in the filing are parent company HDR Global Trading Limited, co-founders Arthur Hayes, Ben Delo and Samuel Reed, and former senior executive Gregory Dwyer.
Plaintiffs say BitMEX described itself publicly as a neutral trading venue while privately operating a desk that took the other side of customer trades. The complaint alleges that this desk had advance visibility into customer orders, including so-called hidden orders, giving insiders a trading advantage that regular users did not have.
Plaintiffs seek 622.66 BTC and other damages
According to the filing, the alleged secret desk caused losses of about 622.66 BTC, equal to roughly $40.7 million as cited in the report. The plaintiffs want the court to certify the matter as a class action, require BitMEX to return users’ bitcoin, and award compensatory damages, punitive damages, attorneys’ fees, litigation costs and interest.
CEO rejects the allegations
BitMEX’s CEO responded by calling the lawsuit “baseless and opportunistic.” The case arrived as the exchange had already said it would cease operations on Sept. 23.
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