Celsius estate sues BitMEX-linked firms for 6,360 BTC

On Sept. 12, the Celsius bankruptcy estate filed a lawsuit in the U.S. Bankruptcy Court for the Southern District of New York against five companies tied to BitMEX: HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings and HDR Global Services. The complaint alleges wrongful liquidations and market manipulation during the March 2020 crypto crash and seeks recovery of at least 6,360.16 BTC.

The estate, acting through estate representative Blockchain Recovery Investment Consortium (BRIC), says BitMEX seized 1,325.84 BTC from Celsius on March 12, 2020, and 5,034.33 BTC from investment fund JST on March 13, 2020; JST later assigned those claims to the estate. The suit asks for the return of the Bitcoin in kind or its equivalent market value, which was about $490 million at the time of filing, plus statutory, punitive and potentially treble damages, any profits tied to the liquidations, and legal fees.

The complaint alleges BitMEX controlled the prices used to trigger liquidations, ran the liquidation engine and maintained an insurance fund that received proceeds from some liquidations. It claims some sell orders executed more than 24% below the next-best ask on the platform and that Bitcoin prices on BitMEX fell below prices on other venues during the liquidation events.

The filing points to a March 13, 2020 service disruption. The estate says forced selling stopped when the platform went offline and prices then recovered. BitMEX previously reported two distributed denial-of-service attacks on March 13 at 02:16 UTC and 12:56 UTC; the estate cites the outage timing in its allegations.

The suit seeks at least 6,360.16 BTC in actual damages or the current dollar equivalent and leaves additional monetary claims for trial. The filing does not state a specific sum for statutory or punitive damages.

A separate proposed class action filed in July by BKX Services and trader David Namdar alleged a combined loss of 622.66 BTC through forced liquidations and claimed an internal trading desk could access private customer information and trade during server freezes. In response to the July complaint, BitMEX described that lawsuit as “an opportunistic claim with no basis” and pledged to defend itself.

Representatives for the Celsius estate and BitMEX did not respond to requests for comment. The lawsuit joins a series of legal disputes tied to forced liquidations in March 2020 and was filed days before BitMEX’s planned Sept. 23 suspension of exchange services.