Celsius sues BitMEX over alleged $495 million Bitcoin fraud and asset seizure
The company accuses BitMEX of manipulating liquidations during a 2020 Bitcoin crash.
Celsius Network and its affiliated entities are suing BitMEX over alleged fraudulent conduct, wrongful liquidation and seizure of about 6,360 BTC, valued at $495 million. The case was filed in US Bankruptcy Court for the Southern District of New York.
Celsius alleges that BitMEX manipulated its trading and liquidation mechanisms during the March 12-13, 2020 market crash, allowing the exchange to profit from customer liquidations. The claims relate to Celsius’s XBTM20 liquidation and claims transferred to Celsius concerning JST’s liquidation on March 13.
The complaint says BitMEX had control over margin requirements, the prices used to trigger liquidations and the liquidation engine that sold customer positions. Celsius alleges that aggressive sell orders, including sell walls and orders more than 24% below the next-best ask, contributed to a liquidation cascade that further pushed down the market.
Celsius also alleges that BitMEX’s Bitcoin price fell materially below prices on other exchanges during the cascade. It says the exchange’s reported DDoS disruption coincided with a halt in liquidations and a rapid price recovery. Celsius is seeking recovery of the Bitcoin and additional damages.