Former BitMEX clients accuse Arthur Hayes and exchange co-founders of fraud
Two former BitMEX clients have filed a class action lawsuit against the company and its co-founders, accusing them of trading against their users and manipulating liquidations. The plaintiffs claim they lost a combined 623 BTC and are seeking the return of their cryptocurrency assets rather than monetary compensation.
The lawsuit was filed in the U.S. District Court for the Southern District of New York on the same day BitMEX announced it would cease operations in September 2026. According to the complaint, the defendants include BitMEX co-founders Arthur Hayes, Samuel Reed and Benjamin Delo, former head of business development Gregory Dwyer, HDR Global Trading Limited and its affiliated entities.
The plaintiffs allege that BitMEX operated a hidden proprietary trading desk that had access to user data and traded against customers on the platform.
Allegations of liquidation manipulation
The complaint alleges that BitMEX intentionally set liquidation thresholds for user positions higher than necessary. This allegedly allowed the exchange to seize the remaining collateral and transfer it to its insurance fund.
The plaintiffs also claim that BitMEX's trading desk used specialized software to identify price levels that would trigger the highest number of liquidations. It then allegedly executed trades designed to move prices toward those levels.
In addition, the lawsuit states that exchange employees could view users' hidden orders and liquidation levels despite BitMEX's assurances that such information remained confidential. The company allegedly used special accounts disguised as ordinary user accounts to conduct its trading activity.
Plaintiffs allege BitMEX manipulated mass liquidations
The complaint separately references the events of March 13, 2020, when BitMEX users were unable to access the platform for approximately 25 minutes. During that period, leveraged positions worth around $800 million were liquidated.
At the time, the company attributed the outage to issues with its cloud service provider and later stated that the disruption had been caused by distributed denial-of-service (DDoS) attacks. However, the plaintiffs allege that the platform shutdown was intentional and that users never received compensation for their losses.
One plaintiff claims to have lost approximately 305.8 BTC across 13 liquidations in 2018, while the other alleges losses of around 316.9 BTC across 14 major liquidations and at least 69 smaller ones between 2019 and 2020.
The lawsuit comes as BitMEX prepares to shut down after 11 years in the cryptocurrency derivatives market. The company has advised users to close their positions and withdraw funds before Sept. 23, 2026.
A U.S. federal court previously ordered BitMEX to pay a $100 million fine after the exchange pleaded guilty to violating the Bank Secrecy Act.
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