Former BitMEX customers have filed a proposed class action lawsuit against the exchange’s co-founders and key executives, alleging a secret trading desk manipulated liquidations to profit from user losses. The legal action, brought in the U.S. District Court for the Southern District of New York, names Arthur Hayes, Samuel Reed, Benjamin Delo, and former business development head Gregory Dwyer, along with HDR Global Trading Limited and affiliated entities.
The plaintiffs—BKX Services Inc. and trader David Namdar—claim they lost a combined 622.66 BTC through forced liquidations of Bitcoin perpetual swap contracts. According to the complaint, BitMEX operated an undisclosed “Insider Trading Desk” that accessed private customer account data and positioned trades against users. The suit further alleges the exchange deliberately designed its liquidation engine to close positions prematurely, funneling excess collateral into its insurance fund rather than returning it to traders.
Attention centers on events of March 13, 2020, when customers lost access for roughly 25 minutes while nearly $800 million in leveraged positions were liquidated. While BitMEX blamed a cloud hardware issue and later DDoS attacks, plaintiffs reject those explanations and assert the platform intentionally blocked users from managing their exposure. The class action also references a similar lawsuit from 2020 that was voluntarily dismissed without prejudice in June 2025, which plaintiffs argue paused the statute of limitations and allows their new claims to proceed.
The lawsuit arrives amid BitMEX’s confirmed plan to cease all trading operations on September 23, following a strategic board review. New account registrations have already stopped, and from August 26 existing users will only be able to reduce positions. Any contracts remaining open at the deadline will be automatically liquidated. BitMEX had earlier pleaded guilty to violating the Bank Secrecy Act, paid a $100 million fine in January 2025, and its founders—including Hayes—were pardoned by U.S. President Donald Trump in March 2025. Despite the pending closure, the exchange maintains that its reserves exceed customer liabilities and has warned users about phishing scams.
The plaintiffs, who estimate the class includes tens of thousands of U.S. customers with claims exceeding $5 million, seek the return of the disputed Bitcoin plus damages. The outcome could set a precedent for how exchanges handle liquidations and customer data, even as BitMEX moves toward a permanent shutdown.
