BitMEX and its co-founders, including Arthur Hayes, were sued in a proposed class action accusing the exchange of keeping customer collateral seized in liquidations and running an internal trading desk with access to confidential position data. The complaint was filed July 23 in the Southern District of New York — the same day BitMEX said it will shut down after 11 years.
Plaintiffs BKX Services Inc. and David Namdar claim BitMEX auto-liquidated their leveraged positions while their remaining collateral was worth roughly twice their losses, then routed the excess into the exchange's insurance fund instead of returning it. Together they seek the return of 622.66 BTC — about $40 million at current prices, per CoinGecko — plus compensatory and punitive damages.
"BitMEX deliberately developed a system that profited from the liquidations (by seizing its customers' bitcoin), while its customers were unable to escape the unfavorable positions BitMEX created," the complaint says.
The filing alleges an internal "Insider Trading Desk," run largely by former business development head Gregory Dwyer out of Manhattan, had "God access" to customer positions and liquidation points, used software to find the price moves that would liquidate the most customers, and kept trading during server freezes that locked everyone else out.
