BitMEX Faces Class-Action Lawsuit Over Alleged Bitcoin Theft and Insider Trading
Cryptocurrency exchange BitMEX announced its decision to shut down operations on July 23, with the closure set for September 23. The company cited a strategic review as the reason behind ending an 11-year operation that had become popular due to perpetual swaps trading. However, within hours of announcing its shutdown, BitMEX was hit by a class-action lawsuit filed in the U.S. District Court for the Southern District of New York. The plaintiffs—BKX Services and David Namdar—allege Bitcoin theft and insider trading, claiming losses totaling 622.66 BTC (worth $40.7 million). They accuse BitMEX's co-founders Arthur Hayes, Ben Delo, and Samuel Reed of creating a system to retain customer collateral and manipulate the insurance fund. The lawsuit also claims that an internal trading desk had access to private user data during server freezes when users were unable to close positions. The plaintiffs seek restitution for lost Bitcoin, compensation, and punitive damages on behalf of U.S. customers who traded swaps from July 23, 2018.
Topics: Bitcoin theft BitMEX shutdown class-action lawsuit insider trading