The Celsius bankruptcy estate has filed a lawsuit against five companies affiliated with BitMEX, accusing the cryptocurrency exchange of fraud, market manipulation and wrongful liquidations that seized more than 6,360 BTC during the March 2020 market crash.
The complaint was filed on Sept. 12 in the US Bankruptcy Court for the Southern District of New York by Celsius entities acting through estate representative Blockchain Recovery Investment Consortium. The defendants named are HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings and HDR Global Services.
The estate alleges BitMEX wrongfully liquidated and seized 1,325.84 BTC in collateral from Celsius on March 12, 2020, and an additional 5,034.33 BTC from investment fund JST the following day. JST later assigned its related claims to the estate, according to the filing. The lawsuit seeks recovery of Bitcoin worth nearly $490 million at the time of writing, and was filed 11 days before BitMEX is scheduled to halt exchange services on Sept. 23.
Celsius contends that BitMEX maintained control over the prices used to trigger liquidations, the engine executing them and the insurance fund that received proceeds from some liquidated positions. The complaint alleges that certain liquidation sell orders were placed at prices more than 24% below the next-best ask available on the platform, and that Bitcoin traded at a lower price on BitMEX than on competing exchanges as the liquidation cycle intensified.
The estate cited the timing of a March 13, 2020, service disruption as evidence that the exchange's liquidation engine intensified the sell-off. According to the filing, liquidation orders stopped when the platform became unavailable, after which Bitcoin's price recovered — a pattern the estate says indicates forced selling on BitMEX had been suppressing the price. BitMEX stated on March 16 that it experienced two distributed denial-of-service attacks on March 13, at 02:16 UTC and 12:56 UTC.
The estate is seeking actual damages of at least 6,360.16 BTC or its current value, plus the return of the Bitcoin in kind or its equivalent market value. The complaint also requests statutory damages, punitive damages, treble damages where applicable, profits BitMEX allegedly earned from the liquidations, and legal fees and costs. The filing does not quantify these additional claims, stating the amounts should be determined at trial.
A separate proposed class action was filed on July 23 by BKX Services and David Namdar, alleging they lost a combined 622.66 BTC through forced liquidations. That complaint alleged an internal trading desk could access private customer information and continue trading during server freezes. A BitMEX spokesperson called that lawsuit "an opportunistic claim with no basis" and said the company would vigorously defend itself. Cointelegraph reached out to the Celsius estate and BitMEX for comment but did not receive a response before publication.
