.jpg)
Celsius Network's bankruptcy estate has sued BitMEX for the return of 6,360.17 Bitcoin, roughly $495 million at current valuations, over forced liquidations from the March 2020 COVID crash, and the timing is a message in itself. The complaint landed September 12 in the U.S. Bankruptcy Court for the Southern District of New York, eleven days before BitMEX permanently ends trading on September 23, the same closure wave that already swept CoinEx into a staged shutdown earlier this month. The bankrupt are now chasing a platform that is about to stop existing as a going concern, and the estate wants its coins back, not a 2020 dollar figure.
What the BitMEX Liquidations Lawsuit Alleges
Blockchain Recovery Investment Consortium, the litigation administrator under Celsius' bankruptcy plan, filed the complaint against five BitMEX-linked companies: HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings and HDR Global Services, entities threaded through Bermuda, the Cayman Islands, England, Hong Kong, the Seychelles and the United States. The claims are fraud, breach of contract, breach of the implied covenant of good faith, conversion, fraudulent transfer and unjust enrichment. The core allegation: Celsius lost 1,325.84 BTC when BitMEX liquidated its position on March 12, 2020, and investment fund JST lost another 5,034.33 BTC the following day, with JST later assigning its claims to the estate. The positions were structured to profit if Bitcoin held its value or rose. Bitcoin instead collapsed as global markets reacted to the pandemic, and leveraged positions everywhere faced margin calls.
The estate's theory goes beyond the mechanics of a normal liquidation. The complaint alleges BitMEX controlled both sides of the process: the mechanism that decided when positions closed and the insurance fund that received assets from some liquidations. That combination, the estate argues, gave the exchange a financial interest in how liquidations ran. The complaint's language is blunt: BitMEX intentionally designed its platform and liquidation procedures to cause liquidations of collateral and defraud its own customers. The filing further alleges the exchange retained excess Bitcoin after closing positions rather than selling only enough to cover obligations. These are allegations, unproven, and the defendants will contest them.
Why an Estate Litigation Skeleton Keeps Fighting
The case is an asset-recovery exercise for creditors. Celsius froze withdrawals in June 2022, filed Chapter 11 the following month, and spent years unwinding, with distributions exceeding $3 billion and a third payout round of roughly $220.6 million beginning in August 2025. Recoveries from estate litigation add to that pool, the same dynamic that drove the recent Satsuma High Court ruling that unlocked a $30.7 million payout for creditor shareholders, and pursuing 6,360 BTC at today's valuation rather than the March 2020 dollar amount is the rational move: the coins were worth a fraction of today's price when the liquidations hit. The estate is essentially arguing that the collateral was improperly taken and should be returned in kind, letting creditors ride six years of Bitcoin appreciation on money they should never have lost.
The irony is structural and worth naming: Celsius itself put customer funds into that leveraged position in the first place. Court records from the bankruptcy documented the gap between the lender's public safety claims and its internal use of highly speculative derivative mechanisms, and examiner Shoba Pillay's report detailed trading and risk-control failures. The estate is now suing over losses Celsius created by exposing pooled customer assets to a leveraged bet during a market crash. Both things can be true: Celsius was reckless, and BitMEX's liquidation engine may have kept what it should have returned.
The Pattern Around BitMEX
This is not an isolated grievance. A proposed class action filed in July by BKX Services and trader David Namdar alleges the same liquidation architecture, engineered forced closures and retained excess collateral, in that case 622.66 BTC, with BKX claiming at least 305.81 BTC and Namdar more than 316.85 BTC, and the suit seeks to represent US traders on the exchange's perpetual swaps back to July 2018. That complaint also alleged BitMEX's internal trading desk had access to private customer information and could keep operating during server outages that locked users out. The Celsius case is separate, focused on March 2020, but both attack the same mechanism: an exchange that controlled the liquidation trigger, the insurance fund and, allegedly, the leftovers.
BitMEX's legal record is already long: a $100 million criminal fine in January 2025 for Bank Secrecy Act violations, guilty pleas from co-founders Arthur Hayes, Benjamin Delo and Samuel Reed in 2022, all later pardoned by President Trump, and earlier civil settlements with the CFTC and FinCEN. The liquidation allegations are new territory, and none of it has been tested. What is tested is the calendar: BitMEX told customers to wind down and withdraw before trading ends September 23, and the estate filed suit first, preserving its claims against the entities while there is still something to sue.
What to Watch
Watch whether the bankruptcy court lets the claims proceed against a platform in wind-down, and whether the BKX class action consolidates discovery with this case, because the two complaints describe the same engine from different windows. Watch the question that shadows any BitMEX proceeding: where the money actually sits across five offshore entities. And for the industry, the case is a reminder that liquidation-engine design is now litigation surface, not fine print. Exchanges that operate their own insurance funds while controlling liquidation triggers should read this complaint as a preview of the discovery requests they may one day answer.
