Bankruptcy creditor Celsius Network filed a lawsuit against companies affiliated with the BitMEX cryptocurrency exchange over liquidations during the March 2020 market crash. The complaint, filed 11 days before BitMEX’s scheduled shutdown, seeks 6,360.1666 BTC, worth about $495 million at the time of filing, or their current value.

Celsius filed the lawsuit in the Southern District of New York through the Blockchain Recovery Investment Consortium. It concerns positions held by Celsius and the JST investment fund and accuses BitMEX of fraud, market manipulation and unlawful misappropriation of digital assets.

Celsius alleges BitMEX amplified bitcoin’s decline

Celsius alleges that BitMEX controlled key parts of its liquidation process, including margin requirements, liquidation trigger prices and the exchange’s Liquidation Engine. According to the complaint, BitMEX used that control to intensify bitcoin’s price decline and create a cascade of forced selling.

Bitcoin lost about 50% of its value on March 12, 2020. BitMEX recorded roughly $12.3 billion in derivatives trading that day, nearly one-quarter of the approximately $53 billion in total cryptocurrency derivatives volume. About $1.1 billion in long contracts were liquidated on the platform over the following 21 hours.

Celsius also alleges that some bitcoin sell orders were placed more than 24% below the next-best sell price available on BitMEX. The company claims the resulting price declines triggered additional liquidations, adding further pressure to the market.

According to the complaint, Celsius lost 1,325.8385 BTC on March 12, while JST lost another 5,034.3281 BTC the next day. Celsius is seeking the return of the combined 6,360.1666 BTC or their current value, along with other damages and any profits BitMEX may have earned from the disputed liquidations.

Earlier lawsuit raised similar allegations

The case is not the first lawsuit against companies linked to BitMEX since the exchange announced its shutdown. In a previous lawsuit, BitMEX was accused of unlawfully misappropriating clients’ bitcoin through an automatic liquidation mechanism.

The plaintiffs in that case allege that the exchange may have used non-public information about traders’ positions. They also claim BitMEX’s internal trading desk could place trades during technical outages when regular customers were unable to trade. The plaintiffs are seeking the return of the seized coins, compensation for damages and other costs provided by law.

BitMEX recently announced that it would wind down operations after a strategic review of its business and the cryptocurrency industry. Trading is scheduled to stop completely on September 23, 2026.

Source: Incrypted