BitMEX Hit With 622.66 BTC Fraud Suit the Exact Day It Announces the Exit 🚪

BitMEX, the crypto derivatives exchange co-founded by Arthur Hayes, is facing a proposed class action accusing it of engineering customer liquidations to seize Bitcoin collateral, a complaint filed the same day the platform said it will shut down after 11 years. BKX Services Inc. and David Namdar filed the lawsuit Thursday in the US District Court for the Southern District of New York, alleging combined losses of 622.66 $BTC, with BKX claiming at least 305.81 $BTC and Namdar at least 316.85 $BTC.

The complaint alleges BitMEX allowed leverage of up to 100 times customer collateral and then automatically liquidated positions while that collateral was still worth roughly twice the losses incurred, routing the remaining $BTC into the platform's insurance fund. Plaintiffs claim an internal trading desk had access to private customer information and continued trading during server freezes that prevented ordinary users from accessing or closing positions. "BitMEX deliberately developed a system that profited from the liquidations," the plaintiffs alleged. Cointelegraph said it reached out to BitMEX for comment and did not receive a response before publication.

Plaintiffs are seeking the return of the allegedly withheld Bitcoin, plus compensatory and punitive damages, on behalf of US customers who purchased $BTC swap products in transactions dating back to July 23, 2018. The filing points to a similar 2020 class action brought by Brett Messieh and other traders under the Commodity Exchange Act, which was voluntarily dismissed without prejudice on June 30, 2025.

The lawsuit landed hours after BitMEX announced it will stop providing services on Sept. 23 following a strategic review by owner HDR Global Trading. The exchange has stopped accepting new registrations and will prevent users from opening new positions starting Aug. 26. The closure announcement was followed by a roughly 90% drop in BitMEX's BMEX utility token.