BitMEX Hit With 623 BTC Lawsuit After Announcing Shutdown

BKX Services Inc. and David Namdar have filed a class action lawsuit against BitMEX.

The plaintiffs accuse the exchange of market manipulation and misappropriating nearly 623 BTC due to forced liquidations.

Lawsuit Questions BitMEX’s Liquidation Practices

Filed on the same day the exchange announced it would shut down, the two claim that BitMEX’s internal trading team accessed customers’ private information and continued trading while servers were down and users were unable to access the platform.

BitMEX has faced accusations over its liquidation practices and internal trading advantages in the past, with the latest lawsuit reviving these allegations.

According to the complaint, the exchange offered its customers leveraged trading of up to 100 times their collateral but allegedly liquidated their positions before all assets had been used up. This resulted in users losing their positions while the remaining BTC collateral was worth more than the losses incurred.

Instead of refunding the excess BTC to traders, BitMEX allegedly redirected the funds to its insurance pool, which, according to the plaintiffs, made it possible for the platform to financially benefit from forced liquidations.

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