Celsius Network's bankruptcy estate has sued BitMEX over forced liquidations during the March 2020 Covid crash, seeking the return of 6,360 BTC valued at approximately $495 million at the time of filing.
The complaint was filed September 12 in U.S. Bankruptcy Court for the Southern District of New York by Blockchain Recovery Investment Consortium, the litigation administrator for the Celsius bankruptcy. The defendants include five BitMEX entities: HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings, and HDR Global Services, spanning jurisdictions including Bermuda, the Cayman Islands, England, Hong Kong, the Seychelles, and the U.S.
According to the filing, Celsius lost 1,325.84 BTC in a liquidation on March 12, 2020. The estate also pursues claims assigned to it by investment fund JST, which lost 5,034.33 BTC the following day. Both positions were structured to profit if bitcoin held steady or increased in value.
The complaint alleges that BitMEX intentionally designed its platform and liquidation procedures to cause liquidations of collateral and defraud its own customers, and that the exchange controlled both the system for deciding when customers were liquidated and the insurance fund that grew from those liquidations.
The lawsuit comes as BitMEX announced plans to wind down operations, with trading ceasing September 23. This marks the second suit filed against BitMEX since the exchange announced its closure in July.
The allegations remain unproven. Notably, the liquidated positions held by Celsius and JST were leveraged long positions funded from customer deposits, contrasting with how Celsius marketed itself as offering low-risk, delta-neutral strategies focused on arbitrage and carry trades before its 2022 collapse.
