The Celsius bankruptcy estate has filed a lawsuit against BitMEX over forced liquidations during the March 2020 market crash, seeking the return of 6,360 BTC now valued at about $495 million.
The complaint was submitted on Sept. 12 in the U.S. Bankruptcy Court for the Southern District of New York by Blockchain Recovery Investment Consortium, the litigation administrator appointed in the Celsius bankruptcy. Celsius alleges that BitMEX’s liquidation system was structured in a way that harmed customers while benefiting the platform’s own insurance fund.
Claims center on two days of market turmoil
The case focuses on liquidations that took place during the sharp sell-off tied to the Covid-era market panic in March 2020. According to the complaint, Celsius lost 1,325.84 BTC in a single liquidation on March 12, 2020.
The estate is also pursuing claims assigned to it by investment fund JST, which the filing says lost 5,034.33 BTC the following day. Combined, those losses amount to 6,360 BTC, the amount Celsius is seeking to recover in the lawsuit.
Allegations against BitMEX’s platform design
In the filing, Celsius argues that both Celsius and JST held positions that would profit only if bitcoin held its value or moved higher. The complaint alleges that BitMEX controlled not only the mechanism that determined when customer positions were liquidated, but also the insurance fund that increased when those liquidations occurred.
The suit claims this structure created a conflict of interest. The complaint states that BitMEX intentionally designed its platform and liquidation procedures to trigger liquidations of customer collateral and defraud users, an allegation that remains to be tested in court.
Defendants named across several jurisdictions
The lawsuit names several BitMEX-related entities as defendants: HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings and HDR Global Services. The complaint says these entities span multiple jurisdictions, including Bermuda, the Cayman Islands, England, Hong Kong, the Seychelles and the United States.
The cross-border footprint of the defendants underscores the complexity of the case, which has been brought through the Celsius bankruptcy process rather than as a standalone civil action.
What happens next
At this stage, the filing sets out Celsius estate’s allegations and recovery demands. No court ruling on the merits was reported in the source material.
The next confirmed step is the bankruptcy court process in New York, where the defendants will have an opportunity to respond to the complaint and the court will consider the estate’s claims.
Source: www.coindesk.com