BitMEX Faces Class Action Lawsuit Over Alleged Forced Liquidations and BTC Losses

Odaily Planet Daily News: The crypto derivatives platform BitMEX is facing a proposed class action lawsuit, with BKX Services Inc. and David Namdar having filed a complaint in the U.S. District Court for the Southern District of New York. The plaintiffs allege that they collectively lost 622.66 BTC due to BitMEX’s forced liquidations, with BKX claiming a loss of at least 305.81 BTC and Namdar claiming a loss of over 316.85 BTC. The complaint alleges that BitMEX’s internal trading desk had access to confidential customer information and was able to continue trading during server freezes, when ordinary users were unable to access the platform or during liquidations. The plaintiffs also claim that BitMEX allowed customers to use up to 100x leverage and automatically liquidated positions even when collateral values remained twice the amount of losses, with the remaining BTC deposited into the platform’s insurance fund. The plaintiffs seek the return of the allegedly withheld bitcoins, as well as compensatory and punitive damages, on behalf of U.S. customers who purchased BTC swap products since July 23, 2018. On the day the lawsuit was filed, BitMEX announced that, following a strategic review by its owner HDR Global Trading, it would cease operations on September 23, have already stopped accepting new registrations, and plans to prohibit users from opening new positions starting August 26.