Celsius sues BitMEX for $495 million over 2020 crash liquidations
Reported by CoinDesk · AI-assisted summary by ChikoCorp AI News Desk
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Summary
Celsius's bankruptcy estate filed a lawsuit against five BitMEX entities on September 12, accusing them of fraud, market manipulation, and wrongful liquidations during the March 2020 Covid crash. The claim involves 6,360 BTC—1,325.84 BTC lost by Celsius and 5,034.33 BTC lost by investment fund JST, assigned to Celsius—valued at about $495 million. BitMEX is scheduled to cease trading on September 23, giving Celsius 11 days to pursue legal action.
Why it matters
The lawsuit alleges that BitMEX intentionally caused customer liquidations to defraud them, highlighting concerns about trading platform practices during periods of market stress. The case may affect perceptions of risk and responsibility among derivative and crypto exchange platforms. The source does not explicitly discuss broader market or policy impacts.
Key context
Celsius collapsed in 2022 despite marketing low-risk, delta-neutral strategies and paying yield on deposits. Internal filings revealed the company engaged in highly speculative derivative trades, including a leveraged long position through the Covid crash period. The complaint claims BitMEX controlled both liquidation timing and an associated insurance fund benefiting from liquidations. This is Celsius's second lawsuit against BitMEX, filed shortly before BitMEX stops operating.
Key numbers and entities
The complaint seeks recovery of 6,360 BTC worth roughly $495 million, split between Celsius (1,325.84 BTC) and JST investment fund (5,034.33 BTC). Defendants include BitMEX entities HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings, and HDR Global Services across Bermuda, Cayman Islands, England, Hong Kong, Seychelles, and the U.S. The litigation is filed in the U.S. Bankruptcy Court for the Southern District of New York by the Blockchain Recovery Investment Consortium.
What remains unclear
The source does not establish the legal merits or specific evidence supporting the fraud and market manipulation claims. There is no detail on BitMEX’s response or defense. The consequences for users, the broader crypto market, or potential regulatory actions remain unexplored.