Celsius Bankruptcy Estate Demands $495 Million in Bitcoin From BitMEX Over 2020 Crash Liquidations

The bankrupt crypto lender Celsius Network is demanding that BitMEX return more than 6,360 bitcoin, a haul worth roughly $495 million, claiming the derivatives exchange rigged its liquidation system to seize customer collateral during the March 2020 pandemic-driven market collapse.

The lawsuit, filed September 12 in the U.S. Bankruptcy Court for the Southern District of New York, targets five entities tied to BitMEX: HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings and HDR Global Services. Blockchain Recovery Investment Consortium, the litigation administrator appointed in the Celsius bankruptcy, is pursuing the case on behalf of the estate.

At the center of the dispute are two liquidation events that unfolded over consecutive days in March 2020, when bitcoin cratered roughly 50 percent in a single session as global markets seized up at the onset of Covid-19. Celsius claims it lost 1,325.84 BTC on March 12, while investment fund JST, whose claims have been assigned to the Celsius estate, allegedly lost an additional 5,034.33 BTC the following day. Together, the two positions account for the 6,360.17 BTC now in dispute.

"BitMEX intentionally designed its platform and liquidation procedures to cause liquidations of collateral and defraud its own customers," the complaint alleges.