Celsius Network's bankruptcy estate has sued BitMEX over liquidation losses sustained during Bitcoin's historic March 2020 selloff. The complaint, filed September 12 in US Bankruptcy Court for the Southern District of New York, accuses the exchange of fraud, market manipulation and wrongful liquidations that resulted in the loss of more than 6,360 Bitcoin, valued at approximately $495 million at the time of filing.
The defendants include Seychelles-based HDR Global Trading Ltd., Hong Kong-based ABS Global Trading Ltd., Shine Effort Inc. Ltd., and Bermuda entities 100x Holdings Ltd. and HDR Global Services Ltd., which collectively operated under the BitMEX name. Blockchain Recovery Investment Consortium (BRIC) brought the case on behalf of Celsius as the bankrupt lender's litigation administrator and complex asset recovery manager.
The March 2020 Market Event
On March 12, 2020, Bitcoin fell sharply as the emerging coronavirus pandemic triggered a broad sell-off across risk assets. The cryptocurrency dropped from approximately $7,200 to near $5,678 within roughly 15 minutes at one stage. Approximately $702 million of positions were liquidated on BitMEX during the initial crash, with nearly all liquidations affecting long positions.
Celsius alleges that BitMEX's liquidation procedures were designed to cause automatic liquidations of collateral and defraud customers. The complaint states that while BitMEX made representations about maintaining an orderly market for derivatives contracts, the exchange intentionally designed its platform to trigger successive rounds of liquidations as prices declined.
Timing and Recovery Strategy
The lawsuit arrives as BitMEX prepares to shut down its exchange on September 23. The exchange announced the closure in July following what it described as a strategic review of its business and the broader industry. BitMEX has stated the closure was not prompted by financial distress, a hack, or immediate regulatory pressure, and that customer assets exceed liabilities.
Celsius first identified BitMEX as a possible litigation target in a September 2023 bankruptcy filing listing claims involving negligence, fraud and market manipulation. The case was later transferred to BRIC's broader post-bankruptcy recovery process after the firm's 2024 appointment. In October 2025, Celsius reached a $299.5 million settlement with Tether following separate litigation brought by the estate.
Legal Challenges Ahead
The estate must establish that its losses flowed from actionable misconduct by BitMEX rather than from the extreme volatility and contract mechanics that traders accepted when opening leveraged positions. The allegations in the complaint remain unproven, and the court has yet to determine liability for the Bitcoin Celsius claims to have lost.
The entities named in the lawsuit remain defendants after trading stops, allowing the case to continue even after the exchange ceases operations. Their response will determine whether the dispute proceeds to discovery into BitMEX's 2020 trading and liquidation systems or faces early challenge on jurisdiction, limitation periods, or the legal sufficiency of Celsius' claims.
