Celsius BitMEX lawsuit seeks $495M in bitcoin before exchange shuts down

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Celsius’s bankruptcy estate sued five BitMEX entities on September 12 in the U.S. Bankruptcy Court for the Southern District of New York.
The complaint seeks the return of 6,360 bitcoin, worth roughly $495 million, tied to forced liquidations during the March 2020 Covid crash.
Celsius alleges BitMEX ran a fraudulent scheme, controlling both the liquidation engine and the insurance fund that profited from it.
BitMEX stops trading on September 23, leaving the estate a narrow window to pursue a defendant that is shutting down.

Celsius Files Lawsuit Against BitMEX Amid Bankruptcy

Celsius Network’s bankruptcy estate filed the complaint through the Blockchain Recovery Investment Consortium, the litigation administrator appointed to handle claims on behalf of the failed lending firm. The filing lands squarely in the U.S. Bankruptcy Court for the Southern District of New York, the same venue that has overseen Celsius’s collapse since it froze withdrawals in 2022 and later filed for Chapter 11 protection.

The lawsuit names five BitMEX-linked entities as defendants: HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings and HDR Global Services. Those companies are registered across Bermuda, the Cayman Islands, England, Hong Kong, the Seychelles and the United States — a corporate footprint that mirrors the offshore structure many crypto derivatives platforms have used to operate outside strict regulatory oversight.

Why does the jurisdiction matter here? Filing inside the bankruptcy court means the case is tied directly to Celsius’s ongoing wind-down, giving the estate’s litigation administrator standing to chase recoveries on behalf of creditors who lost money when the platform went under.

What Celsius Is Claiming Happened in 2020

According to the complaint, Celsius itself lost 1,325.84 BTC in a single liquidation event on March 12, 2020 — the day markets across the world, including crypto, went into free fall as Covid fears triggered a global selloff. Also being pursued by the estate is a distinct claim that was assigned to it by investment fund JST, which suffered a loss of 5,034.33 BTC on the very next day, March 13, 2020. Combined, the two claims total 6,360 bitcoin, now valued at approximately $495 million.

Both positions, the filing states, were structured to profit only if bitcoin held steady or rose in value — meaning the sudden liquidations wiped out bets that were never meant to lose money during a downturn of that scale.

Allegations of Wrongful Liquidation and Bitcoin Seizure

Celsius says BitMEX wrongfully liquidated and seized digital assets worth over 6,000 bitcoin, and the complaint goes further than simply blaming market volatility for the losses. It frames the liquidations as a deliberate, engineered outcome rather than the ordinary risk of trading on margin.

“The Liquidations were not ordinary trading losses,” the filing states. “They were the intended result of BitMEX’s fraudulent scheme to generate staggering amounts of revenue at the expense of its own customers.”

The complaint alleges that BitMEX controlled both sides of the equation: the system that decided when customer positions got liquidated, and the insurance fund that grew fatter every time a liquidation occurred. That dual control, according to the filing, is central to the fraud allegation. A separate line in the complaint adds that “BitMEX intentionally designed its platform and liquidation procedures to cause liquidations of collateral and defraud its own customers.”

This matters beyond the dollar figure. If proven, it would suggest BitMEX’s liquidation engine wasn’t just a risk-management tool but a revenue mechanism that activated precisely when volatility spiked — the exact moment traders are least able to defend their positions.

A Position That Cuts Against Celsius’s Own Marketing

There’s an added wrinkle that complicates the picture. Celsius built its reputation on paying yield to depositors while promoting supposedly low-risk, delta-neutral strategies — arbitrage, funding-rate harvesting, carry trades designed to avoid directional exposure to bitcoin’s price swings. A leveraged long position wiped out by a market crash doesn’t sit comfortably next to that pitch.

A 2022 bankruptcy filing disclosed that, behind the delta-neutral messaging, Celsius actually ran what it described as “several highly speculative derivative and asset deployment mechanisms.” That admission was later echoed in the findings of the court-appointed bankruptcy examiner’s final report. The BitMEX position now at the center of this lawsuit fits the profile those filings describe — a leveraged bet funded from a pooled customer book, rather than the conservative hedge Celsius advertised to depositors.

None of that changes the legal question of whether BitMEX defrauded its customers. But it does add context for anyone trying to understand how a firm marketed as cautious ended up exposed to a leveraged long position during one of crypto’s most violent crashes.

BitMEX Operational Status and Implications

BitMEX is a crypto exchange that is being wound down, with trading set to stop on September 23. That deadline puts real pressure on the timeline of this case. Celsius’s estate filed the complaint on September 12, giving it roughly eleven days before BitMEX ceases trading activity entirely.

Pursuing a claim against a company that is actively shutting down raises practical questions about how any judgment, if one is ever reached, would eventually be enforced or collected. It also signals that Celsius’s litigation administrators see enough value — and enough evidence — in the 2020 liquidations to move quickly rather than wait.

For the broader crypto lending and derivatives industry, the case is a reminder that bankruptcy estates are still actively hunting for recoverable assets years after their platforms collapsed — and that liquidation mechanics from the 2020 Covid crash remain legally unsettled territory, even as exchanges tied to that era shut their doors for good.

FAQ

Who filed the lawsuit against BitMEX?

Celsius, a bankrupt crypto lending firm, filed the lawsuit against BitMEX through its bankruptcy estate’s litigation administrator, the Blockchain Recovery Investment Consortium.

Where was the lawsuit filed?

The lawsuit was filed in the U.S. Bankruptcy Court for the Southern District of New York.

What is Celsius accusing BitMEX of?

Celsius accuses BitMEX of wrongfully liquidating and seizing digital assets worth over 6,000 bitcoin as part of a fraudulent scheme designed to generate revenue at the expense of its customers.