A lawsuit claims BitMEX ran an insider desk with 'god access' to customer data, trading against users and seizing 100% of collateral on 50% losses. The exchange plans to shut by Sept. 23.
Alpha Score of 43 reflects weak overall profile with weak momentum, poor value, weak quality, moderate sentiment.
A new lawsuit claims BitMEX operated an insider trading desk that used customer data to force liquidations and pocket the proceeds. The exchange is already winding down by September 23.
The complaint, filed Thursday in the Southern District of New York by BKX Services and David Namdar, names former CEO Arthur Hayes, former CTO Samuel Reed, co-founder Benjamin Delo, and former Head of Business Development Gregory Dwyer as defendants. It alleges the exchange ran a fraudulent scheme through an insider desk managed largely by Dwyer throughout 2018.
BitMEX employees had so-called "god access" to private customer data and used that visibility to trade against users, the lawsuit claims. The exchange allegedly employed burner accounts to place trades that triggered mass liquidations. During volatile market periods, BitMEX locked out customers by freezing its servers while the insider desk continued trading, plaintiffs said.
The complaint also alleges the exchange’s liquidation engine seized 100% of customers’ collateral even when losses reached only 50% of posted funds. BitMEX funneled the excess into an insurance fund that could be emptied for its own profit, the plaintiffs claim.
BKX Services and Namdar are seeking class certification and the return of over 600 BTC lost in forced liquidations, plus compensatory damages and legal costs.
This is not BitMEX’s first legal setback. In January 2025, the exchange settled Bank Secrecy Act violations with the Department of Justice for $100 million, after prosecutors said it willfully failed to maintain an adequate anti-money laundering program.
BitMEX announced in June it would wind down operations by September 23. The exchange has not yet commented on the new lawsuit.
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.