- The Celsius bankruptcy estate sued five Bitmex-linked companies, alleging fraud, market manipulation, and wrongful liquidations during the March 2020 crash.
- The lawsuit seeks recovery of 6,360.16 BTC worth nearly $490 million, filed 11 days before BitMEX stops exchange services on Sept. 23.
- The estate claims BitMEX’s liquidation engine intensified the sell-off, with some sell orders placed at prices more than 24% below the next-best ask.
The Celsius bankruptcy estate has sued five BitMEX-linked companies, alleging fraud, market manipulation, and wrongful liquidations during the March 2020 market crash, according to a complaint filed on Sept. 12 in the US Bankruptcy Court for the Southern District of New York. Defendants include HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings, and HDR Global Services.
The estate alleged that BitMEX wrongfully liquidated and seized 1,325.84 BTC in collateral from Celsius on March 12, 2020, and 5,034.33 BTC from investment fund JST the following day. JST subsequently assigned its related claims to the estate, according to the filing. The lawsuit seeks recovery of Bitcoin worth nearly $490 million at the time of writing.
The Celsius estate alleges that BitMEX controlled the prices used to trigger liquidations, the engine that executed them, and the insurance fund that received proceeds from some liquidated positions. Some liquidation sell orders were placed at prices more than 24% below the next-best ask available on the platform. The estate cites the timing of BitMEX’s March 13, 2020, service disruption as evidence that the exchange’s liquidation engine intensified the sell-off.
On March 16, 2020, BitMEX said it experienced two distributed denial-of-service attacks on March 13. The estate is seeking actual damages of at least 6,360.16 BTC or its current value, along with the return of the Bitcoin in kind or its equivalent market value. The complaint also requests statutory damages, punitive and any applicable treble damages, profits BitMEX allegedly earned from the liquidations, and legal fees and costs.
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