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BitMEX faces class action over alleged forced liquidations
The lawsuit, filed in US District Court for the Southern District of New York, seeks return of allegedly withheld BTC plus compensatory and punitive damages, with claims covering trades dating back to July 23, 2018.
Cointelegraph reports BitMEX has been hit with a proposed class action seeking damages from the crypto derivatives platform, alleging it fraudulently engineered customer liquidations to seize traders’ Bitcoin collateral as it prepares to shut down in September.
According to the filing by BKX Services Inc. and David Namdar in the US District Court for the Southern District of New York, the plaintiffs allege combined losses of 622.66 BTC from forced liquidations on BitMEX, including at least 305.81 BTC for BKX and more than 316.85 BTC for Namdar.
The complaint alleges BitMEX provided an internal trading desk with privileged access to private customer information and could keep trading during server freezes that prevented ordinary users from accessing or closing positions. It also alleges BitMEX allowed leverage of up to 100 times collateral and automatically liquidated positions while the collateral was allegedly still worth twice the losses.
The plaintiffs seek return of allegedly withheld Bitcoin and compensatory and punitive damages, aiming to represent US customers who bought BTC swap products in transactions starting July 23, 2018. Cointelegraph also notes the suit comes after a prior related class action filed in 2020 was voluntarily dismissed without prejudice.
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