BitMEX Gets Served: Celsius Estate Sues for ~$490M in BTC Just 11 Days Before Shutdown ⚖️

The Celsius bankruptcy estate filed a lawsuit on Sept. 12 against five BitMEX-linked companies in the US Bankruptcy Court for the Southern District of New York, alleging fraud, market manipulation and wrongful liquidations tied to the March 2020 market crash. The complaint was lodged by Celsius entities through estate representative Blockchain Recovery Investment Consortium (BRIC) against HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings and HDR Global Services. The filing was reported by Cointelegraph, which said it reached out to the Celsius estate and BitMEX for comment but did not receive a response before publication.

According to the complaint, BitMEX wrongfully liquidated and seized 1,325.84 BTC in collateral from Celsius on March 12, 2020, and 5,034.33 BTC from investment fund JST the following day, with JST later assigning the related claims to the estate. The estate is seeking the return of 6,360.16 BTC or its current value — Bitcoin worth nearly $490 million at the time of writing — along with statutory damages, punitive and any applicable treble damages, profits the defendants allegedly earned from the liquidations, and legal fees and costs.

The estate alleges that BitMEX controlled the prices used to trigger the liquidations, the engine that executed them and the insurance fund that received proceeds from some liquidated positions. It claims that some 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 complaint cites the timing of BitMEX's March 13, 2020, service disruption as evidence that the exchange's liquidation engine intensified the sell-off, alleging that liquidation orders stopped when the platform became unavailable and that $BTC's price then recovered. On March 16, 2020, BitMEX said it experienced two distributed denial-of-service attacks on March 13, at 02:16 UTC and 12:56 UTC.

The lawsuit was filed 11 days before BitMEX is scheduled to stop exchange services on Sept. 23. In a separate proposed class action filed on July 23, BKX Services and David Namdar alleged they lost a combined 622.66 BTC through forced liquidations, claiming that an internal trading desk could access private customer information and continue trading during server freezes. Responding to that case, a BitMEX spokesperson told Cointelegraph it was an "opportunistic claim," without elaborating before publication.