Celsius sues BitMEX over liquidation of 6,360 BTC

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Celsius sues BitMEX over 6,360 BTC

Celsius accuses BitMEX of wrongful liquidations

According to the lawsuit, BitMEX allegedly wrongfully liquidated Celsius positions on March 12, 2020, and seized 1,325.84 BTC used as collateral. The following day, another 5,034.33 BTC belonging to investment fund JST was allegedly liquidated in a similar manner. JST later transferred the related claims to the Celsius estate.

The plaintiffs claim BitMEX simultaneously controlled the prices used to trigger liquidations, the mechanism used to execute them and the insurance fund that received part of the proceeds. Some liquidation sell orders were allegedly placed at prices more than 24% below the nearest available ask price on the platform.

The complaint also alleges that Bitcoin traded at a discount on BitMEX compared with rival exchanges as liquidations intensified. Celsius links this to the platform's forced liquidation mechanism and claims it amplified the market decline.

The plaintiffs also cite a BitMEX outage on March 13, 2020. They claim that once the platform went offline, the flow of liquidation orders stopped and Bitcoin's price began to recover. BitMEX previously said it was hit by two DDoS attacks that day.

Celsius seeks return of 6,360 BTC

The bankruptcy estate is seeking the return of at least 6,360.16 BTC or their current market value. The lawsuit also seeks statutory and punitive damages, disgorgement of BitMEX's alleged profits from the liquidations and reimbursement of legal costs.

The complaint does not specify the amount of these additional claims, which the plaintiffs say should be determined during the proceedings. As a result, the total potential claims could exceed the current value of the disputed Bitcoin.

In July, BKX Services and David Namdar filed a separate proposed class action against BitMEX, claiming they lost a combined 622.66 BTC through forced liquidations. The plaintiffs also alleged that the exchange's internal trading operation had access to confidential customer information and could continue trading during server outages.

BitMEX called the July lawsuit "opportunistic" and without merit, saying it intended to vigorously defend itself. That statement referred specifically to the case brought by BKX Services and Namdar and does not represent the company's response to the new Celsius allegations.

Earlier, we reported that the BitMEX founder made a record donation to Britain's Reform UK party ahead of the next parliamentary election. The contribution was the largest single-donor donation the party had received.

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