BitMEX, the exchange that essentially invented leveraged crypto trading for the masses, announced on July 23 that it would shut down for good on September 23, 2026. Within hours, a class-action lawsuit landed in the US District Court for the Southern District of New York.
The lawsuit: 622 Bitcoin and a long list of grievances
The complaint was filed by BKX Services Inc. and David Namdar against HDR Global Trading Limited, BitMEX’s parent company. Also named: co-founders Arthur Hayes, Ben Delo, and Samuel Reed.
The core allegation is straightforward. Plaintiffs claim BitMEX’s liquidation engine was designed not just to manage risk, but to systematically extract value from users. The suit puts a number on it: 622.66 BTC, worth roughly $40.7 million.
Here’s how the plaintiffs say it worked. When traders got liquidated, their remaining collateral didn’t just cover the loss. According to the complaint, leftover assets were funneled into BitMEX’s insurance fund, effectively padding the exchange’s balance sheet with money that should have gone back to users.
The lawsuit also raises a more explosive claim: insider trading. The allegation is that certain internal traders at BitMEX had access to private user data, particularly during server outages, giving them an unfair edge.
The class the plaintiffs seek to represent includes US customers who used BTC swap products on BitMEX dating back to July 23, 2018.
A shutdown years in the making
BitMEX’s decline from industry titan to shutdown candidate didn’t happen overnight. The exchange launched in 2014 and quickly became the go-to venue for high-leverage trading, offering bitcoin perpetual swaps with leverage ratios as high as 100x.
Then came 2020. The US Department of Justice and the Commodity Futures Trading Commission charged Hayes, Delo, and Reed with violating the Bank Secrecy Act by failing to implement adequate anti-money laundering procedures. Hayes eventually pleaded guilty and was sentenced to house arrest.
A previous class-action lawsuit covering similar liquidation allegations had been working through the courts for years. That case closed in June 2025 without ever ruling on the liquidation claims. The exchange also underwent management changes recently, with a new CEO appointed shortly before the shutdown announcement, following the departure of its CEO and CFO.