Lawsuit: BitMEX used ‘god access’ to force liquidations
A suit in the Southern District of New York alleges BitMEX staff used ‘god access’ and secret accounts to trade against customers and seeks recovery of more than 600 BTC.
A lawsuit filed in the Southern District of New York names BitMEX and four former executives, alleging the exchange ran an insider trading desk that used ‘god access’ to trade against users and force liquidations. Plaintiffs say the scheme cost customers more than 600 BTC.
BKX Services, a Nevada corporation operating in New York, and trader David Namdar brought the complaint. Defendants include co‑founders Arthur Hayes, Samuel Reed and Benjamin Delo, and former head of business development Gregory Dwyer. The filing seeks class certification, compensatory damages, legal fees and an in‑kind return of the Bitcoin claimed lost.
The complaint says employees used privileged access to view private customer data and placed trades from secret ‘burner’ accounts to target vulnerable positions. It alleges the insider desk was active largely in 2018 and that trades were timed to trigger mass liquidations.
Plaintiffs allege BitMEX froze its servers during volatile market periods, preventing customers from adding collateral or changing positions while insiders executed trades. The filing states the exchange’s liquidation engine seized 100% of posted collateral in some cases even when account losses were about 50%.
The complaint adds that seized funds flowed into an insurance fund that could be emptied for the platform’s benefit. Plaintiffs ask a judge to return more than 600 BTC and to award damages and attorneys’ fees if the court finds the allegations supported by evidence.
The suit was filed as BitMEX announced plans to wind down operations by Sept. 23. It follows a January 2025 enforcement action in which BitMEX agreed to pay $100 million to resolve alleged Bank Secrecy Act violations related to its anti‑money‑laundering program.
The filing includes timelines and internal records that plaintiffs say show coordinated account access and trade timing. The complaint does not include statements from the defendants. The case will proceed in federal court, where plaintiffs will ask a judge to certify a class of affected users.
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