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BitMEX has been hit with a proposed class action lawsuit in the United States accusing the cryptocurrency derivatives exchange of engineering customer liquidations that allegedly allowed it to retain hundreds of Bitcoin before its planned September shutdown.

Summary

BitMEX has been sued in a proposed class action alleging it engineered customer liquidations to retain hundreds of Bitcoin. The plaintiffs are seeking the return of 622.66 BTC along with compensatory and punitive damages on behalf of eligible US traders. The lawsuit was filed on the same day BitMEX confirmed it will shut down its exchange operations in September. Court filings in the U.S. District Court for the Southern District of New York show that BKX Services Inc. and trader David Namdar filed the complaint on Thursday, alleging they lost a combined 622.66 BTC through forced liquidations on BitMEX. BKX claims losses of at least 305.81 BTC, while Namdar alleges losses exceeding 316.85 BTC.

Filed on the same day BitMEX confirmed it would wind down its exchange business, the lawsuit revives allegations that have circulated around the platform’s liquidation system for years. The plaintiffs argue that the exchange’s internal trading operations gave it an unfair advantage over customers during periods of market stress.

Plaintiffs seek return of Bitcoin According to the complaint, BitMEX offered leveraged trading of up to 100 times customers’ collateral but allegedly liquidated positions before all available collateral had been exhausted. The filing claims customers often lost their positions while the remaining Bitcoin collateral was still worth substantially more than the trading losses.

The plaintiffs allege the excess Bitcoin was transferred into BitMEX’s insurance fund instead of being returned to users, allowing the exchange to benefit financially from forced liquidations. They further claim an internal trading desk had access to non-public customer information and was able to continue trading during server outages that prevented ordinary users from managing or closing their own positions.

“BitMEX deliberately developed a system that profited from the liquidations,” the plaintiffs alleged in the complaint.

Alongside the return of the allegedly withheld Bitcoin, BKX Services and Namdar are seeking compensatory and punitive damages. The proposed class action also seeks to represent U.S. customers who traded Bitcoin perpetual swap products in transactions dating back to July 23, 2018.

The filing also points to an earlier class action brought in 2020 by Brett Messieh and other traders, who made similar allegations under the Commodity Exchange Act. Court records cited in the complaint show that case was voluntarily dismissed without prejudice on June 30, 2025, allowing similar claims to be brought again.

Lawsuit coincides with exchange closure The legal action arrives as BitMEX prepares to end more than a decade of exchange operations.

Earlier on Thursday, HDR Global Trading, the owner and operator of BitMEX, announced that it had decided to close the cryptocurrency derivatives platform following a strategic review of both the business and the digital asset industry. The company said exchange operations will end at 04:00 UTC on Sept. 23.

BitMEX has already stopped accepting new account registrations. Beginning Aug. 26, traders will no longer be able to open new positions and will only be permitted to reduce existing ones. During the weeks leading up to the closure, the exchange said it will progressively close outstanding positions, while any remaining open positions at the final deadline will be liquidated automatically.

The company also said contracts with limited liquidity may be settled early under its existing settlement procedures, with advance notice provided to affected users where necessary.

Although trading services will end in September, BitMEX said customers will continue to have access to their accounts for withdrawals and to review wallet balances and transaction history. Users who leave funds on the platform after the shutdown will be charged either the equivalent of $50 per month or 1% annually, whichever is higher, with fees deducted monthly from verified accounts.

BitMEX also warned customers to remain alert for phishing campaigns attempting to exploit news of the shutdown. It said no priority withdrawal service exists and cautioned users against anyone claiming they could accelerate withdrawals. The company added that increased withdrawal requests and Bitcoin network confirmation times could occasionally delay processing during the wind-down period.

Separately, BitMEX said its reserves remain higher than customer liabilities and pointed users to its proof of reserves and liabilities data as evidence that customer assets remain fully backed.

Exchange closes after months of restructuring The closure follows several months of internal changes at the exchange.

Earlier this month, BitMEX replaced chief executive Stephan Lutz as part of a management restructuring that also saw chief financial officer Ina Steiner and chief growth officer Raphael Polansky leave the company. Former chief operating officer and global general counsel Peter Wilkinson was subsequently appointed chief executive.

The leadership overhaul came while reports indicated the exchange had been exploring a potential sale. BitMEX has not announced a transaction since those reports emerged.

The company has undergone several executive changes since 2020, when founders Arthur Hayes, Ben Delo and Samuel Reed stepped down after U.S. authorities accused the exchange of failing to implement adequate anti-money laundering controls. BitMEX later pleaded guilty to those charges.

Alexander Höptner became chief executive in 2021 before Lutz took over during the cryptocurrency market downturn in 2022.

Founded in 2014, BitMEX became one of the earliest cryptocurrency derivatives exchanges and introduced the 100x leveraged perpetual swap, a product that later became widely adopted across the industry. In announcing its closure, the company said it had operated for more than 11 years without losing customer funds to hacks and thanked users for supporting the platform throughout its history.

The exchange’s shutdown announcement was followed by a sharp decline in its BMEX utility token, which fell by roughly 90% after the closure plans became public.

PANews, July 24 – Blockchain data analysis platform Bubblemaps stated that after BitMEX announced its closure, its platform token BMEX fell sharply, currently down about 95% from its previous level. According to BitMEX’s publicly disclosed tokenomics, approximately 75% of the total BMEX supply was originally planned for employee incentives, ecosystem development, and long-term reserves, but these tokens have never been distributed on-chain.

Data shows that in 2021, about 92% of the BMEX supply was locked in vesting contracts, with the remaining 8% distributed at token launch, including: 5% for airdrops; 3% for product and liquidity support.

Each allocation category previously corresponded to a separate address for receiving future unlocked tokens. However, to date, only one claim has been recorded: on November 2, 2022, the product and liquidity address claimed approximately 63.75 million BMEX, while the addresses for employee incentives, ecosystem growth, and long-term reserves have seen no token claims.

Bubblemaps noted that this does not necessarily indicate a problem, as the project may have subsequently adjusted its tokenomics, contracts, or distribution plan without reflecting these changes on-chain. But according to the previously public BMEX tokenomics design, the tokens in these allocation buckets have not yet actually entered on-chain circulation.

BitMEX, co-founded by Arthur Hayes and others, pioneered the perpetual contract trading model, having a significant impact on the development of the crypto derivatives market. Following the announcement of the closure, market confidence in BMEX was noticeably shaken.

Cryptocurrency derivatives exchange BitMEX has parted ways with several senior leaders in a swift leadership transition made public on June 29, 2026. The company has removed its Chief Executive Officer Stephan Lutz, Chief Financial Officer Ina Steiner, and Head of Growth Raphael Polansky from their positions.

This collective shift stands out for its scale and speed, affecting key functions including overall strategy, financial oversight, and user expansion efforts at once.

Peter Wilkinson, formerly serving as the platform’s global general counsel and chief operating officer, has assumed the role of CEO.

Information on immediate successors for the CFO and growth positions remains limited in initial coverage.

The exchange itself has yet to release detailed public comments explaining the motivations behind the changes or outlining a full succession roadmap.

This type of broad executive adjustment often reflects a strategic decision by the board or key stakeholders to pursue a fresh approach.

It differs from typical gradual transitions and may indicate an intent to address operational priorities or adapt to evolving market realities more decisively.

BitMEX, launched in 2014, helped shape the crypto trading landscape by introducing perpetual swap contracts that allow leveraged positions without fixed settlement dates.

The platform attracted significant volume in Bitcoin and other digital asset derivatives, particularly among professional traders comfortable with high leverage.

Its early success highlighted the demand for sophisticated risk-management tools in emerging digital markets.

However, the exchange has encountered persistent regulatory and market headwinds.

Past issues included US investigations into compliance practices, leading to earlier leadership departures by the founding team and eventual corporate resolutions involving penalties.

Stephan Lutz had taken the helm in late 2022 following a previous CEO change, steering the firm through a difficult industry cycle marked by reduced activity and heightened compliance demands.

The current developments arrive during a period of cautious sentiment across crypto markets. Bitcoin prices have shown weakness recently, with broader indicators reflecting elevated uncertainty.

Many platforms have responded to these conditions by tightening operations, reducing headcount, or evaluating strategic alternatives such as potential sales or partnerships.

Observers suggest the move could facilitate stronger governance, improved efficiency, or preparation for future opportunities in a competitive environment.

Wilkinson’s background in legal and operational matters positions him to emphasize stability and regulatory alignment as the company moves ahead.

Day-to-day trading, withdrawals, and platform availability are anticipated to proceed normally, though users are advised to stay informed through official channels.

Leadership changes at established exchanges like BitMEX underscore the sector’s maturation.

As digital asset trading evolves, platforms must balance innovation with robust risk controls and adaptability.

This overhaul may mark the start of renewed focus on core strengths while navigating external pressures.

Stakeholders will await further clarification from BitMEX on its vision under the updated team.

In the interim, the event serves as a reminder of the importance of monitoring counterparty dynamics when engaging with centralized trading venues.

The derivatives space remains dynamic, and such transitions can influence confidence and liquidity profiles over time. Overall, while details are still emerging, the shift highlights ongoing efforts by BitMEX to position itself effectively amid industry challenges and opportunities.

Zcash has completed a two-phase emergency network upgrade to fix a critical vulnerability in its Orchard shielded pool — a flaw that sat undetected for four years, could theoretically have allowed unlimited undetectable counterfeit ZEC creation, and triggered a 50% price collapse before the network’s swift response began restoring confidence and driving a recovery in ZEC’s price.

Josh Swihart, CEO of Electric Coin Company — the primary developer of Zcash — posted on X on June 7 confirming the fix was complete and the network secure, as ZEC began its recovery from the lows reached after the vulnerability’s disclosure.

The post arrived at a critical moment for the asset: ZEC had crashed approximately 50% from a June 4 peak of $624 to $309 on June 5, wiping more than $3 billion from its market capitalization, per the BitMEX Blog’s documented timeline of the incident.

ZEC's price trends to the upside over the past 48 hours, as seen on the daily chart. Source: ZECUSD on Tradingview How The Zcash Bug Was Found — And What It Was The vulnerability was discovered on May 29, 2026 by security researcher Taylor Hornby during a protocol audit commissioned by Shielded Labs. Hornby identified a “soundness” flaw in Zcash’s Orchard zero-knowledge proof circuit — specifically an under-constrained element in the Orchard Action circuit that could allow invalid state transitions, creating a theoretical double-spending risk within the shielded pool.

The discovery was made using Anthropic’s Claude Opus 4.8 AI model alongside a custom analysis suite, per Shielded Labs’ official disclosure. Hornby and the AI developed a working proof-of-concept that successfully generated unlimited, completely undetectable counterfeit ZEC in a local test environment — described by one independent analyst as “about the worst kind of bug a cryptocurrency can have,” per Yahoo Finance’s reporting of the disclosure.

Critically, the flaw did not permit inflation of the total ZEC supply on the live network. Zcash’s internal turnstile accounting mechanism — which tracks the total value moving into and out of the shielded pool — confirmed no unauthorized value creation occurred while the flaw was active, per Shielded Labs’ official statement.

However, the organization acknowledged directly that due to the privacy properties of Orchard and the nature of the bug, there is no definitive cryptographic way to determine whether exploitation occurred — a limitation inherent to the shielded pool’s design that became its own source of market concern. The vulnerability had been present since Orchard’s activation in May 2022 — four years — without detection.

The Emergency Response Zcash’s development ecosystem responded with unusual speed. The first phase was an emergency soft fork deployed through Zebra 4.5.3, activated at block 3,363,426 on June 2, which temporarily disabled all Orchard transactions to remove the attack path while developers prepared the permanent fix.

Transparent and Sapling transactions continued operating normally throughout, per the Zcash Foundation’s official announcement on X. The second phase arrived on June 3 through the NU6.2 hard fork — activated at block 3,364,600 via Zebra 5.0.0 — which introduced a corrected circuit and a new verifying key, patching the flaw and re-enabling Orchard transactions, per the Foundation.

The market’s initial reaction to the hard fork was positive. ZEC rose from $544 on June 2 to $603 on June 3, continuing to $624 on June 4 — its highest level since the rally began. Then Arthur Hayes publicly disclosed he had exited his entire ZEC position intraday on June 4 — the same day as the peak — citing five macro factors including higher energy prices and upcoming AI IPOs, per his X post covered in prior reporting. The combination of Hayes’ exit and lingering uncertainty about whether exploitation had occurred before the patch sent ZEC to $309 on June 5.

The Recovery And What It Means Swihart’s June 7 X post — reassuring the community that total ZEC supply remained intact throughout and that the network had passed through the emergency without confirmed exploitation — appears to have been the catalyst for the recovery now underway. The swift two-phase response, combined with the Foundation’s transparent disclosure and Swihart’s direct communication, provided the confidence signal the market needed.

This development marks a pivotal and genuinely uncomfortable moment for Zcash’s long-term positioning in the nascent sector. A four-year-old vulnerability in the Orchard pool — the very component that defines ZEC’s core privacy value proposition — has been fixed cleanly and without confirmed exploitation.

But the structural irony that the privacy properties that make Zcash valuable also make it impossible to confirm the vulnerability was never used will remain a question mark the community will need to address as the recovery continues.

As of this writing, ZEC trades at around $430, recovering from its June 5 lows as confidence in the network’s security response gradually rebuilds.

Cover image from Grok, ZECUSD Chart from Tradingview