The Celsius bankruptcy estate has sued five BitMEX-linked companies, alleging fraud, market manipulation, and wrongful liquidations during the March 2020 market crash. The complaint was filed September 12 in U.S. Bankruptcy Court for the Southern District of New York by Celsius entities represented by the Blockchain Recovery Investment Consortium (BRIC).
Defendants named in the suit include HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings, and HDR Global Services. The estate alleges that BitMEX wrongfully liquidated and seized 1,325.84 BTC from Celsius on March 12, 2020, and 5,034.33 BTC from investment fund JST the following day. JST subsequently assigned its related claims to the Celsius estate.
The lawsuit seeks recovery of Bitcoin worth approximately $490 million at the time of filing and was initiated 11 days before BitMEX scheduled the cessation of exchange services for September 23.
Allegations of Price Control and Manipulation
The Celsius estate contends that BitMEX controlled the prices used to trigger liquidations, the engine executing them, and the insurance fund receiving proceeds from some liquidated positions. According to the complaint, certain liquidation sell orders were placed at prices exceeding 24% below the next-best ask available on the platform. The estate also alleges that Bitcoin traded at lower prices on BitMEX compared to competing exchanges as the liquidation cycle intensified.
The complaint cites BitMEX's March 13, 2020, service disruption as evidence supporting its claims. The estate alleges that liquidation orders ceased when the platform became unavailable, and Bitcoin's price subsequently recovered—suggesting, according to the estate's argument, that forced selling on BitMEX had been suppressing the price. BitMEX reported experiencing distributed denial-of-service attacks on March 13 at 02:16 UTC and 12:56 UTC.
Damages and Additional Claims
The estate seeks actual damages of at least 6,360.16 BTC or its current market value, along with the return of Bitcoin in kind or its equivalent value. The complaint also requests statutory damages, punitive damages, treble damages where applicable, profits BitMEX allegedly earned from the liquidations, and legal fees and costs. Additional damages amounts remain unquantified and will be determined at trial.
In July, a separate proposed class action was filed by BKX Services and David Namdar, alleging combined losses of 622.66 BTC through forced liquidations. That complaint alleged an internal trading desk could access private customer information and continue trading during server freezes. BitMEX previously characterized such claims as opportunistic and stated it would defend itself vigorously.
