- Two former BitMEX customers have filed a proposed class-action lawsuit alleging the exchange secretly traded against its own users.
- The complaint claims BitMEX operated an undisclosed “Insider Trading Desk”, manipulated liquidations, and froze the platform during periods of market volatility.
- BitMEX has not been found liable for these allegations, which were filed shortly before the exchange announced it would shut down in September.
Two former BitMEX customers have filed a proposed class-action lawsuit against the cryptocurrency exchange and several of its founders, accusing the company of secretly trading against its own users and manipulating liquidations for profit.
The lawsuit was filed in the U.S. District Court for the Southern District of New York on the same day BitMEX announced plans to permanently shut down its exchange after more than 11 years of operation.
The complaint names Arthur Hayes, Samuel Reed, Benjamin Delo, former executive Gregory Dwyer, parent company HDR Global Trading Limited, and several affiliated entities as defendants.
Plaintiffs Allege Secret Trading Desk
According to the complaint, BitMEX allegedly operated an undisclosed “Insider Trading Desk” that used confidential customer trading information to place positions against users.
The plaintiffs claim the desk had visibility into order flow, liquidation levels, and hidden orders that ordinary traders could not access.
They further allege the exchange used anonymous internal accounts to conceal its own trading activity while benefiting from customer liquidations.
These allegations remain unproven and will need to be evaluated through the legal process.
Claims of Manipulated Liquidations
The lawsuit also accuses BitMEX of setting liquidation thresholds higher than necessary, allowing the platform to seize additional customer collateral after leveraged positions were closed.
According to the complaint, excess collateral was allegedly directed into the exchange’s insurance fund rather than being returned to traders.
The plaintiffs additionally claim BitMEX manipulated prices on external reference exchanges and used proprietary software to identify price movements that would trigger the largest number of liquidations.
BitMEX has not publicly responded to these specific allegations.
March 2020 Outage Revisited
The complaint revisits the well-known March 13, 2020 outage, during which users were reportedly unable to access the platform for approximately 25 minutes while hundreds of millions of dollars in leveraged positions were liquidated.
At the time, BitMEX attributed the disruption first to cloud hardware issues and later to distributed denial-of-service (DDoS) attacks.
The plaintiffs argue the platform outages were intentional and allege affected customers were never compensated. These claims have not been established in court.
Legal Battle Begins as BitMEX Winds Down
The proposed class action seeks the return of Bitcoin allegedly lost during the disputed liquidations rather than monetary damages alone, with plaintiffs estimating aggregate claims exceeding $5 million.
The case follows an earlier lawsuit involving similar allegations that was voluntarily dismissed without prejudice in 2025.
The new filing also arrives after BitMEX previously pleaded guilty to Bank Secrecy Act violations, paid regulatory penalties, and announced plans to permanently cease exchange operations on September 23.
As the exchange prepares to close, the lawsuit opens a new legal chapter that could draw renewed attention to one of the cryptocurrency industry’s earliest and most influential derivatives platforms.
