BitMEX was hit with a class-action lawsuit Friday that accuses the exchange of deliberately engineering customer liquidations to seize their Bitcoin collateral. The suit landed on the same day BitMEX announced it will cease operations, effective September 23, 2026, following a strategic review.
The lawsuit and the shutdown
Plaintiffs BKX Services Inc. and investor David Namdar filed the complaint in the US District Court for the Southern District of New York. They claim collective losses of 622.66 BTC — 305.81 BTC for BKX and 316.85 BTC for Namdar. The allegations haven't been proven in court.
The timing isn't great for BitMEX. The exchange told customers to close positions and withdraw assets before the shutdown, but now it faces a legal fight over exactly how those positions were closed in the past.
How the liquidation engine allegedly worked
The core of the complaint: BitMEX's liquidation engine was designed to benefit the exchange, retaining excess Bitcoin collateral instead of returning it after positions were closed. BitMEX offered leveraged trading of up to 100x, which amplified the risk of liquidation during volatile markets.
The lawsuit also points to server outages and disruptions during those volatile periods, arguing they contributed to avoidable liquidations. The plaintiffs say the exchange engineered the whole system to seize traders' Bitcoin.
What happens next
BitMEX's shutdown is set for September 23. Customers are supposed to have their assets withdrawn by then. The class action will proceed in parallel — the court will have to decide whether the liquidation engine was rigged or just badly designed. Both sides are likely to start sparring over discovery and motions in the coming weeks.
