Celsius estate sues BitMEX over 6,360 BTC liquidations

The Celsius bankruptcy estate sued five BitMEX-linked companies over alleged liquidations of 6,360 BTC during the March 2020 market crash. The complaint was filed on Sept. 12 in the US Bankruptcy Court for the Southern District of New York. Celsius entities acted through estate representative Blockchain Recovery Investment Consortium. The defendants include HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings and HDR Global Services. The estate alleges that BitMEX liquidated and seized 1,325.84 BTC in Celsius collateral on March 12, 2020. It alleges that BitMEX liquidated and seized 5,034.33 BTC from investment fund JST the following day. JST later assigned the related claims to the estate. The lawsuit seeks the recovery of Bitcoin worth nearly $490 million at the time of writing. The estate also seeks actual damages of at least 6,360.16 BTC or its current value. The complaint requests the return of the Bitcoin in kind or its equivalent market value. It also seeks statutory damages, punitive damages, applicable treble damages, profits allegedly earned from the liquidations, and legal fees and costs. The filing does not quantify the additional claims. It says those amounts should be determined at trial. The estate alleges that BitMEX controlled the prices that triggered liquidations. It also alleges that BitMEX controlled the liquidation engine and the insurance fund that received proceeds from some liquidated positions. The complaint alleges that some liquidation sell orders were placed at prices more than 24% below the next-best ask on the platform. The estate cites a March 13, 2020, service disruption as evidence that BitMEX's liquidation engine intensified the sell-off. It alleges that liquidation orders stopped when the platform became unavailable. Bitcoin's price then recovered. BitMEX said on March 16, 2020, that it experienced two distributed denial-of-service attacks on March 13. The attacks occurred at 02:16 UTC and 12:56 UTC. A separate proposed class action filed by BKX Services and David Namdar alleges losses of 622.66 BTC through forced liquidations. A BitMEX spokesperson called that July lawsuit an opportunistic claim with no basis. The spokesperson said BitMEX would vigorously defend itself. The statement concerned the July lawsuit and did not respond to the Celsius complaint.