BitMEX, the Seychelles-based cryptocurrency derivatives exchange, announced its shutdown on the same day a proposed class action lawsuit was filed against the company. The lawsuit seeks 623 bitcoin — worth roughly $16 million at current prices — and accuses the exchange of using privileged trading access and server freezes to profit from forced liquidations.
Shutdown Announcement
The exchange did not provide a detailed reason for the closure in its announcement. Users were told to withdraw funds by a specified deadline, though the exact date was not included in the facts provided. The shutdown marks the end of a platform that once dominated the crypto derivatives market.
Lawsuit Allegations
The proposed class action, filed in a U.S. court, alleges that BitMEX gave certain traders preferential treatment. According to the complaint, these traders had access to order-book data and could freeze the exchange's servers during periods of high volatility. This allowed them to avoid being liquidated while other users were forced out of their positions at a loss.
The lawsuit claims that BitMEX itself profited from these practices, as the forced liquidations generated fees for the exchange. The plaintiffs argue that this was a breach of the platform's terms of service and fiduciary duties to its users.
What the Lawsuit Seeks
The plaintiffs are asking for 623 BTC in damages, representing the alleged losses suffered by the class. They are also seeking a court order to prevent BitMEX from destroying any relevant records. The case has been filed as a class action, meaning it could represent thousands of affected traders.
BitMEX has not yet responded to the lawsuit. The company's shutdown announcement did not mention the litigation, leaving open the question of whether the two events are connected.
