BKX Services and David Namdar claim 622.66 BTC in losses. The lawsuit, filed a day after BitMEX shut down, alleges the exchange ran an internal desk that traded against customers.
Alpha Score of 42 reflects weak overall profile with weak momentum, poor value, weak quality, moderate sentiment.
BitMEX and its founders face another class action lawsuit, this time over claims the exchange secretly traded against its own users through an internal desk.
Plaintiffs BKX Services and David Namdar say they lost a combined 622.66 BTC (roughly $40.7 million) trading on the platform. The complaint, filed July 23 in the U.S. District Court for the Southern District of New York, names HDR Global Trading Limited, co-founders Arthur Hayes, Ben Delo, Samuel Reed, and former executive Gregory Dwyer as defendants.
The lawsuit landed a day after BitMEX shut down its crypto derivatives exchange.
The filing alleges BitMEX operated what it calls an "Insider Trading Desk" – an internal operation that traded directly against customers while the exchange publicly marketed itself as a neutral marketplace. The plaintiffs claim BitMEX had privileged access to customer orders, including "hidden orders," giving insiders a trading advantage ordinary users could not see.
Customers thought they were trading against other market participants, the complaint argues. Instead, BitMEX itself was allegedly taking the opposite side of trades.
One of the central allegations involves customer liquidations. The filing claims BitMEX used the internal desk to profit from forced position closures while generating additional trading fees. The exchange earned more than $1 billion in transaction fees between November 2014 and October 2024, according to the complaint, while its flagship XBTUSD perpetual contract processed over $2 trillion in trading volume during that period.
BKX Services claims losses of 305.8 BTC. Namdar says he lost 316.86 BTC through multiple liquidations. The complaint argues customers collectively lost thousands of Bitcoin as a result of the alleged conduct.
The lawsuit also revisits the March 13, 2020 crash, when roughly $800 million in leveraged positions were liquidated while many users could not access the exchange because of system outages. The alleged insider trading desk continued operating during the disruption, the filing claims. The plaintiffs argue BitMEX generated what the complaint calls "ill-gotten gains" through trading fees, customer liquidations, and its growing Insurance Fund.
The plaintiffs are asking the court to certify the case as a class action and order BitMEX to return customers' Bitcoin. They also seek compensatory and punitive damages, legal fees, court costs, and interest.
Users would not have traded on BitMEX if they had known about the alleged hidden desk, the complaint states.
The lawsuit follows BitMEX's 2020 legal troubles, when U.S. regulators charged the company over anti-money laundering and Bank Secrecy Act violations. Hayes, Delo, and Reed pleaded guilty to related charges in 2022, with Hayes receiving six months of home confinement and Delo two years of probation. Reed was sentenced to 18 months of home confinement.
The new case shifts the focus from compliance failures to how BitMEX allegedly handled customer trades internally – a question that, if proven, could carry implications for how crypto exchanges disclose their own trading activity.
The shutdown of BitMEX's exchange the day before the filing means the platform's user base has already scattered. Whether the alleged victims can recover assets from a defunct exchange is a separate question the court will have to weigh.
Drafted by a large language model from the source reporting linked above, then screened by automated publishing checks. It is not read by a journalist before publication. Some articles cite our Alpha Score. Verify prices and figures against the original source. Educational coverage, not personalized advice.