Blockchain Recovery Investment Consortium (BRIC), a joint venture of Vaneck and GXD Labs, filed a lawsuit on September 12 against five BitMEX entities in U.S. Bankruptcy Court in Manhattan. The suit seeks to recover 6,360 BTC for Celsius customers over liquidations that occurred during the March 12–13, 2020 bitcoin crash, when the price fell 50% to below $4,000.
According to the complaint, BitMEX closed two trading accounts holding Celsius bitcoin at prices that allegedly existed only on BitMEX's order book. The plaintiffs claim the exchange's trading activity worsened the market crash during this period.
Alleged Liquidation Practices
BRIC alleges that BitMEX "intentionally designed its platform and liquidation procedures to cause liquidations of collateral and defraud its own customers," turning "market crises into a profit center."
On March 13, 2020, BitMEX experienced approximately 25 minutes of downtime, which the exchange attributed to distributed denial-of-service (DDoS) attacks. During the outage, BTC jumped from around $3,900 to $5,300. When BitMEX resumed trading, the lawsuit claims liquidation orders executed "at a price that existed nowhere but on BitMEX's own broken book."
Insider Trading Allegations
The lawsuit repeats accusations made in a separate case filed by BKX Services and David Namdar on July 23, the same day BitMEX announced its shutdown. Both suits allege that BitMEX personnel had "God Access"—described as real-time access to customer account, order-flow, execution, open-position, and liquidation information unavailable to ordinary customers.
BRIC claims this Insider Trading Desk could see where customers would be forced out and trade against them using anonymized "burner" email accounts across various crypto exchanges. The BKX Services suit seeks class-action status and recovery of 623 BTC lost to forced liquidations.
Insurance Fund Questions
BRIC alleges that collateral from liquidated positions was transferred to BitMEX's Insurance Fund, creating an incentive for the exchange to liquidate customer positions. According to the lawsuit, the fund grew by 4,457 BTC during March 12–13, 2020, peaking at 37,836 BTC. BitMEX previously stated that the fund lost 2,606 BTC on March 13 and does not cover operating costs or contribute to company profits.
BitMEX, which ceased trading on September 23, has not publicly responded to the lawsuit. The allegations come as a reminder that Celsius itself faced scrutiny for making large, risky bets with borrowed funds while marketing safe investments to customers.
