The Celsius Network bankruptcy estate has sued five BitMEX-linked entities in a New York bankruptcy court, seeking the return of 6,360.17 Bitcoin now worth $495 million. The lawsuit challenges forced liquidations from the March 2020 Covid crash, alleging BitMEX designed its platform to trigger liquidations and profit from customer collateral. The legal action comes just 11 days before BitMEX permanently shuts down its exchange operations on September 23, 2026.
Celsius lawsuit against BitMEX entities
- ▪The Celsius Network bankruptcy estate filed a lawsuit against five BitMEX-linked entities on September 12, 2026, in the U.S. Bankruptcy Court for the Southern District of New York.
- ▪The Celsius Network lawsuit was brought by the Blockchain Recovery Investment Consortium, acting as the litigation administrator for the Celsius bankruptcy estate.
- ▪The Celsius Network lawsuit alleges fraud, breach of contract, wrongful liquidation, market manipulation, and unjust enrichment regarding how BitMEX handled leveraged positions.
- ▪The Celsius Network lawsuit names five defendants: HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings, and HDR Global Services.
March 2020 Bitcoin crash liquidations
- ▪Celsius Network alleges that on March 12, 2020, it transferred 350 Bitcoin of additional margin at 23:47 UTC, but BitMEX liquidated the position before confirming the transfer.
- ▪The Celsius Network estate is pursuing claims assigned to it by JST Alpha 1, a Cayman Islands investment fund that lost 5,034.33 Bitcoin to liquidation on March 13, 2020.
- ▪The Celsius Network lawsuit seeks the return of 6,360.17 Bitcoin, valued at approximately $495 million, or its equivalent value at current market prices.
- ▪Celsius Network claims it lost 1,325.84 Bitcoin from a forced liquidation on March 12, 2020, during the COVID-19 market selloff.
BitMEX liquidation system design allegations
- ▪Celsius Network alleges that BitMEX controlled both the mechanisms determining customer liquidations and an insurance fund that received proceeds from those liquidations, creating a conflict of interest.
- ▪The Celsius Network complaint alleges that BitMEX intentionally designed its platform and liquidation procedures to cause collateral liquidations and profit from customer collateral.
- ▪A separate proposed class action filed in July 2026 by BKX Services and David Namdar similarly alleges that BitMEX engineered forced liquidations to retain 622.66 Bitcoin.
Bankruptcy estate recovery claims
- ▪Celsius Network filed for Chapter 11 bankruptcy on July 13, 2022, after freezing customer withdrawals, and began distributing assets to creditors in January 2024.
- ▪In October 2025, the Celsius Network bankruptcy estate reached a $299.5 million settlement with Tether following litigation brought by the estate.
- ▪Celsius Network's bankruptcy filings and examiner Shoba Pillay's report revealed that the lender ran highly speculative derivative mechanisms despite marketing low-risk strategies.
BitMEX exchange shutdown timing
- ▪Celsius creditor Simon Dixon stated that filing the lawsuit before the wind-down completes helps preserve claims against BitMEX assets before corporate structures change.
- ▪BitMEX announced in July 2026 that it would wind down operations on September 23, 2026, following a strategic review of its business.
- ▪The Celsius Network lawsuit was filed 11 days before BitMEX is scheduled to permanently shut down its exchange operations on September 23, 2026.
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