Celsius Claims $495 Million from Crypto Exchange BitMEX
According to CryptoSlate, on September 12, Celsius bankruptcy estate filed a lawsuit in the U.S. Bankruptcy Court for the Southern District of New York against BitMEX's operating entities, accusing them of fraud, market manipulation, and improper forced liquidation during the Bitcoin crash in March 2020, resulting in a loss of 6,360 Bitcoins, valued at approximately $495 million at the time of the lawsuit.
The case was brought by the Blockchain Recovery Investment Consortium (BRIC), representing the interests of Celsius creditors, listing five related entities as defendants: HDR Global Trading registered in Seychelles, ABS Global Trading registered in Hong Kong, Shine Effort Inc. Ltd., and 100x Holdings and HDR Global Services registered in Bermuda. The complaint alleges that "BitMEX deliberately designed its platform and liquidation procedures to cause collateral to be liquidated, thereby deceiving its customers."
The case stems from the "Black Thursday" crash on March 12, 2020, when the Bitcoin price plummeted from around $7,200 to about $5,678 in approximately 15 minutes, leading to about $702 million in positions being forcibly liquidated on the BitMEX platform, primarily long positions. Celsius claims that its losses were not due to normal market fluctuations but rather the fraudulent and manipulative actions inherent in BitMEX's platform mechanisms and operations.
This lawsuit comes just 11 days before BitMEX's official shutdown— the exchange announced it would cease operations on September 23 at 4 AM UTC, ending its 11-year history, attributing the closure to a "strategic business review" by its parent company HDR Global Trading, and emphasizing that the shutdown was not due to financial difficulties, hacking, or regulatory pressure. On the same day the shutdown announcement was made (July 23), the exchange faced another class-action lawsuit—plaintiffs BKX Services and David Namdar accused BitMEX and three co-founders of designing a liquidation mechanism to siphon off customer collateral, involving approximately 622.66 Bitcoins (about $40.7 million), and the complaint stated that BitMEX's internal trading desk had traded using customer privacy information during server outages when regular users could not close positions.
BitMEX was co-founded in 2014 by Arthur Hayes, Ben Delo, and Samuel Reed, and at its peak in 2019, its annual trading volume exceeded $1 trillion, capturing about 57% of the global crypto derivatives market. In 2022, the three founders were convicted of violating the U.S. Bank Secrecy Act and were fined a total of $30 million. On March 28, 2025, Trump announced pardons for Hayes, Delo, Reed, and another former employee, clearing previous federal felony charges.
Plaintiff Celsius is also a key player in a significant collapse in the crypto industry— the company froze user withdrawals on June 12, 2022, and filed for bankruptcy on July 13. Founder Alex Mashinsky was later charged with commodity and securities fraud, including misleading users through false promises and misappropriating customer funds to manipulate the price of the CEL token for a profit of about $48 million, ultimately sentenced to 12 years in prison and ordered to forfeit $48.39 million. Celsius's bankruptcy estate had previously reached a settlement of about $300 million from a $4.3 billion claim against stablecoin issuer Tether, and this lawsuit against BitMEX continues the same strategy of "recovering from historical trading counterparties" as part of its bankruptcy asset liquidation plan.
From a cash flow perspective, this is a typical "bankruptcy liquidation-type" recovery lawsuit rather than a market-level trading activity: the Celsius bankruptcy estate no longer has actual operating business, and its value realization entirely depends on whether it can recover funds from historical trading counterparties. Therefore, it continues to file lawsuits against historical trading partners, including Tether and BitMEX, essentially turning bankruptcy liquidation into a "responsibility arbitrage" targeting systemic risk events in the crypto industry from 2020 to 2022. The timing of the lawsuit, 11 days before BitMEX's shutdown, objectively reflects litigation strategy considerations—once the operating entity is dissolved or assets are transferred, the difficulty of recovery will significantly increase, and timely filing helps secure claims while assets are still executable. The beneficiaries are the creditor group of Celsius; if they win or reach a settlement, recovered funds will be returned to affected users according to the bankruptcy distribution plan. The pressured parties are the BitMEX-related entities and their historical shareholders, which are already in the liquidation phase—against the backdrop of the founders having received presidential pardons and resolved criminal liabilities, civil claims have become the last unresolved legal battle from the "Black Thursday" incident in 2020.
Source: Public Information
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The "Black Thursday" controversy surrounding BitMEX is not the first lawsuit—there was a similar class-action lawsuit in 2020 involving liquidation accusations, which took five years to resolve without substantial rulings on the related liquidation claims until June 2025; now, Celsius's lawsuit is essentially a "second recovery" of the same historical event in a bankruptcy context, compounded by the new class-action lawsuit filed on July 23 for 622.66 Bitcoins, indicating that the legal accountability surrounding the 2020 crash has still not truly concluded six years later. A key historical background is that the three founders of BitMEX pleaded guilty to violations of the Bank Secrecy Act in 2022, collectively paying $30 million in fines, but were fully pardoned by President Trump in March 2025—this means that the same individuals have had their criminal responsibilities "cleared," but the historical accounts in civil claims are still being settled.
Celsius's path to fund recovery has formed a clear strategy—after freezing withdrawals in June 2022 and filing for bankruptcy in July, the Celsius bankruptcy estate did not stop at liquidating remaining assets but continued to file large lawsuits against historical trading counterparties: previously, it reached a settlement of about $300 million from a $4.3 billion claim against stablecoin issuer Tether, and now it has turned its sights on BitMEX, claiming $495 million; this "bankruptcy entity transforming into a professional recovery entity" capital operation model essentially converts the originally sunk bankruptcy losses into a continuous legal claim against the balance sheets of historical trading counterparties, directly affecting how much principal creditors can ultimately recover.
This is highly similar to the path taken by Lehman Brothers' bankruptcy liquidation team, which took over a decade to continuously sue historical trading counterparts to recover assets—often, the "second half" of a bankruptcy entity's life is longer and involves larger amounts than its normal operational period. The current crypto derivatives exchange industry is undergoing a new round of reshuffling: BitMEX, as the inventor of perpetual contracts, ultimately chose to shut down due to "liquidity, market makers, and whales continuously flowing to competitors with deeper order books, faster listings, and fewer regulatory concerns," which is logically no different from traditional financial institutions like Lehman and Bear Stearns exiting the historical stage due to changes in competitive dynamics—only this time, the exit method is proactive shutdown rather than passive bankruptcy, while legal accountability has concentrated in the final countdown to the shutdown.
This is essentially a structural separation of regulatory and judicial responsibilities along "criminal" and "civil" tracks—Trump's pardon resolved the founders' personal criminal liability issues but did not and cannot exempt the operating entity from civil compensation responsibilities to customers and trading counterparties, meaning that "personal pardons" and "corporate civil accountability" are becoming two parallel tracks that advance independently. Mechanically, as long as the bankruptcy entity still has legal subject status and historical trading records can be traced and evidenced, the civil accountability window for systemic crash events will continue to exist, not automatically closing due to the platform ceasing operations or the founders receiving pardons—this means that for the entire crypto derivatives industry, even after exiting the market, the legal risks from the historical trading mechanism design will be revisited years later, becoming a delayed but not absent liquidation.
ABAB News · Cognitive Law
- Pardons can exempt criminal liability but not civil accounts.
- Companies can shut down, but accounts cannot.
- Bankruptcy is not the end; it's another way of collecting debts.