BitMEX faces a proposed class action lawsuit alleging its co-founders ran a secret trading desk that used customer data to engineer liquidations, filed the same day the exchange announced it would shut down in September.
What Are The Plaintiffs Actually Alleging?
BKX Services Inc. and David Namdar filed the complaint in the US District Court for the Southern District of New York on Thursday, claiming combined losses of roughly 622.66 Bitcoin (CRYPTO: BTC), worth approximately $40.7 million at current prices, according to the filing.
The first allegation centers on a hidden trading desk that ran from BitMEX’s Manhattan office throughout 2018 under former business development head Gregory Dwyer.
The desk used software to pinpoint which price moves would force the most customer liquidations, then traded to push prices to those exact levels.
Plaintiffs say the desk saw everything — customer account data, hidden orders, and liquidation points, despite BitMEX telling users that information stayed private.
The second allegation centers on March 13, 2020, when users lost access to the platform for about 25 minutes as BitMEX force-closed roughly $800 million in leveraged positions.
BitMEX first pointed to a cloud hardware failure, then switched its explanation to two DDoS attacks four days later. Plaintiffs claim BitMEX gave false explanations, deliberately froze the platform, and never compensated any affected users.
What Did BitMEX Say In Response?
Benzinga reached out to BitMEX for comment and received a response from CEO Peter Wilkinson.
“This is yet another spurious and opportunistic claim that has no basis whatsoever,” Wilkinson said.
“We have had many such claims against us in our history and successfully dealt with each and every one, and look forward to vigorously defending ourselves again this time,” he added.
Plaintiffs filed a substantially similar lawsuit in the same court in April 2020 before voluntarily dismissing it on June 30, 2025.
BitMEX pleaded guilty in 2024 to violating the Bank Secrecy Act and was fined an additional $100 million in January 2025. However, President Donald Trump pardoned the co-founders in March 2025.
How Much Did Each Plaintiff Lose?
BKX Services claims losses of at least 305.8 BTC across 13 liquidations between July and August 2018.
Namdar claims roughly 316.9 BTC lost across 14 named liquidations plus at least 69 smaller ones, spanning August 2019 to May 2020.
Both plaintiffs are seeking return of the actual Bitcoin rather than cash damages, a legal claim known as replevin.
The proposed class covers anyone who bought Bitcoin swap products on BitMEX in domestic U.S. transactions from July 23, 2018 onward, with aggregate claims estimated above $5 million.
The suit names co-founders Arthur Hayes, Samuel Reed, Benjamin Delo, and Gregory Dwyer as defendants alongside parent company HDR Global Trading and four affiliated entities.
Photo via Shutterstock
Login to comment