Key PointsOn September 12, Celsius Network’s bankruptcy estate initiated legal action against BitMEX concerning liquidations from the March 2020 market collapseThe estate demands the recovery of 6,360.17 BTC, currently valued at approximately $495 millionBitMEX is accused of operating both the liquidation system and the insurance fund that profited from these forced closuresThis marks the second legal challenge against BitMEX following its July shutdown announcement; operations cease September 23All claims are currently allegations awaiting judicial review in U.S. courtsThe bankruptcy estate of Celsius Network has initiated a lawsuit targeting BitMEX, demanding the recovery of 6,360.17 Bitcoin valued at roughly $495 million. The legal action focuses on compulsory liquidations executed during the March 2020 financial turmoil triggered by the COVID pandemic.Celsius Sues BitMEX 11 Days Before Exchange Shutdown, Seeking $495 MillionCelsius’ bankruptcy estate sued entities linked to BitMEX in the U.S. Bankruptcy Court for the Southern District of New York on Sept. 12. The complaint alleges fraud, market manipulation and wrongful… pic.twitter.com/NeXYwJGjN9— Wu Blockchain (@WuBlockchain) September 16, 2026Filed on September 12 with the U.S. Bankruptcy Court for the Southern District of New York, the complaint originates from the Blockchain Recovery Investment Consortium, acting as litigation administrator for the Celsius bankruptcy proceedings.The lawsuit identifies five corporate entities connected to BitMEX: HDR Global Trading, ABS Global Trading, Shine Effort, 100x Holdings, and HDR Global Services. These companies maintain operations spanning Bermuda, the Cayman Islands, England, Hong Kong, the Seychelles, and the United States.The Disputed Bitcoin LiquidationsOn March 12, 2020, Celsius experienced a loss of 1,325.84 BTC when BitMEX forcibly closed its trading position. The next day, investment fund JST suffered an additional loss of 5,034.33 BTC, subsequently transferring its legal claims to the Celsius estate.Both trading positions were designed to generate returns if Bitcoin maintained or increased its price. However, Bitcoin experienced a severe decline as worldwide markets responded to the escalating COVID-19 pandemic.The bankruptcy estate contends that BitMEX went beyond simply closing positions to mitigate losses. According to the complaint, the exchange retained Bitcoin collateral that rightfully belonged to its customers.With Bitcoin trading at approximately $77,800, the total 6,360.17 BTC amounts to nearly $495 million. The estate is specifically seeking the actual Bitcoin rather than its historical dollar equivalent from the time of liquidation.Allegations of Conflict of Interest in Liquidation ProcessCentral to the lawsuit is the assertion that BitMEX maintained control over the liquidation mechanism. The complaint further alleges the exchange simultaneously controlled the insurance fund receiving proceeds from liquidations, creating a direct financial incentive for the platform.“BitMEX intentionally designed its platform and liquidation procedures to cause liquidations of collateral and defraud its own customers,” the filing states.This represents the second lawsuit challenging BitMEX’s liquidation methodology since the platform disclosed its impending closure in July. Another proposed class action, brought by BKX Services alongside trader David Namdar, advances comparable allegations, claiming BitMEX withheld 622.66 BTC that should have been returned to users.BitMEX’s regulatory history includes previous enforcement actions. A federal judge mandated HDR Global Trading pay a $100 million criminal penalty in January 2025 for violations of the Bank Secrecy Act. Co-founders Arthur Hayes, Benjamin Delo, and Samuel Reed entered guilty pleas in 2022, though President Donald Trump pardoned them in 2025.BitMEX will terminate all trading activities on September 23. The Celsius lawsuit currently exists as a filed complaint, with no determination of liability yet established.The post Celsius Estate Demands $495M From BitMEX Over 2020 Bitcoin Liquidation Controversy appeared first on Blockonomi.