Image credit: Shutterstock
Celsius Network’s bankruptcy estate has sued five companies behind BitMEX, alleging the exchange wrongfully liquidated and seized 6,360.1666 BTC during the March 2020 market crash. The disputed Bitcoin is worth roughly $490 million at current prices.
The complaint was filed Sept. 12 in the US Bankruptcy Court for the Southern District of New York, 11 days before BitMEX is scheduled to end exchange operations on Sept. 23. The allegations have not been tested in court, and BitMEX has not filed a response to the Celsius lawsuit.
Celsius Claims Two March 2020 Liquidations Seized 6,360 BTC
The estate says BitMEX liquidated a Celsius position on March 12, 2020 and took 1,325.8385 BTC in collateral as Bitcoin prices collapsed.
A second liquidation the following day involved investment fund JST and 5,034.3281 BTC. JST later assigned its related claims to Celsius, bringing the amount covered by the lawsuit to 6,360.1666 BTC.
Blockchain Recovery Investment Consortium is pursuing the case on behalf of the Celsius estate. The defendants include HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings and HDR Global Services.
Celsius Alleges Liquidation Orders Traded 24% Below Next-Best Ask
Celsius alleges BitMEX controlled the prices used to trigger liquidations, the engine that executed them and an insurance fund that received proceeds from some liquidated positions.
The complaint says some liquidation sell orders were placed at prices more than 24% below the next-best ask available on the platform. The estate alleges those orders contributed to a liquidation cycle that pushed Bitcoin lower and triggered further forced closures.
BitMEX said in March 2020 that its platform experienced two DDoS attacks on March 13, at 02:16 UTC and 12:56 UTC.
The estate is seeking at least 6,360.1666 BTC or its equivalent value, along with additional damages and profits it alleges BitMEX earned from the liquidations.
BitMEX Exchange Closes September 23 After Derivatives Settle
BitMEX announced in July that exchange operations will end at 04:00 UTC on Sept. 23 following a strategic review by owner HDR Global Trading. The company said the decision was not caused by financial distress, a hack or immediate regulatory pressure.
All remaining futures and perpetual swap contracts were scheduled for early settlement on Sept. 16 at 12:00 UTC as part of the wind-down.
Customers can continue withdrawing balances after exchange services end through BitMEX’s restricted post-closure interface.
The Celsius lawsuit will proceed separately from the operational shutdown, leaving the estate pursuing claims against the BitMEX-linked corporate entities after exchange trading ends.
