Celsius Sues BitMEX Seeking $495 Million, Accusing It of Manipulating Liquidations

TechFlow reports that on September 17, according to CoinDesk, the Blockchain Recovery Investment Consortium, which is administering the bankrupt estate of Celsius Network, filed a civil lawsuit on September 12 in the U.S. District Court for the Southern District of New York against BitMEX and its affiliated entities (covering five companies including HDR Global Trading and ABS Global Trading) for alleged market manipulation and fraud. The litigation primarily targets forced liquidation events that took place amid significant volatility in the crypto market in March 2020, with the total claimed damages currently standing at approximately $495 million.

According to details disclosed in the complaint, this substantial claim encompasses two tranches of forcibly liquidated Bitcoin: Celsius itself suffered losses of 1,325.84 BTC in a single day on March 12, 2020, while the investment fund JST lost 5,034.33 BTC the following day (March 13). This latter tranche of interests has been transferred to the bankrupt estate of Celsius, bringing the combined total to 6,360 BTC.

The central point of contention in the case concerns the fairness of the liquidation system. The complaint strongly alleges that BitMEX “deliberately designed its platform and liquidation mechanisms to trigger the liquidation of customer collateral and commit fraud against its own clients,” asserting that BitMEX simultaneously controlled both the systems that determine when liquidations are executed and the insurance fund built up from these liquidation activities.