Regulations

Story: BitMEX Lawsuit Targets 622 Bitcoin and Four Co-Founders Before September Shutdown

By James Thorp

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What the Plaintiffs Actually Allege. The core accusation is pretty straightforward, at least on paper.

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BitMEX CEO Pushes Back, Shutdown Looms. BitMEX CEO Peter Wilkinson didn't mince words. He called the allegations "spurious and…

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BitMEX is facing a proposed class action filed July 23 in the Southern District of New York. The suit wants 622.66 Bitcoin back — not dollars, actual Bitcoin.

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The two principal plaintiffs are BKX Services Inc. and David Namdar. BKX Services claims it lost 305.809 BTC. Namdar says he lost 316.856 BTC.

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The core accusation is pretty straightforward, at least on paper. The plaintiffs say BitMEX's liquidation engine closed out traders' positions prematurely — specifically when…

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But it gets messier. The complaint also alleges that BitMEX ran an internal trading desk with access to customer positions and liquidation points.

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Unclear how much of that the plaintiffs can prove. But the allegation is specific enough to matter.

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The suit pushes claims of replevin and fraud rather than the Commodity Exchange Act violations that formed the basis of a 2020 class action against BitMEX.

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See also: Crypto Treasury Firms Dump Bitcoin for AI Bets, Shares Still Bleeding

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BitMEX CEO Peter Wilkinson didn't mince words. He called the allegations "spurious and opportunistic" and said the company intends to defend itself vigorously.

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The timing is awkward for BitMEX regardless of the merits. The Financial Services Authority of Seychelles confirmed that HDR had voluntarily withdrawn its virtual-asset license…

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BitMEX says its assets exceed its liabilities. It's also promised that after closure, users can still log in, view balances, and withdraw funds.

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The shutdown notice is completely silent on the Bitcoin tied to historical liquidations. There's no mention of what happens to the 622.66 BTC the plaintiffs are claiming.

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See also: Michael Saylor Unveils 953-Hour Reading Program to Understand Bitcoin

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The plaintiffs want the actual Bitcoin returned, not a dollar conversion. That distinction matters.

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