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BTC Arthur Hayes faces class action: BitMEX is accused of using customer data to secretly trade and manipulate liquidation
Arthur Hayes is facing a proposed class action lawsuit in which two former BitMEX customers accuse him and other company executives of operating a secret trading business allegedly profiting from users 'losses. The lawsuit puts the BitMEX co-founder at the center of allegations, alleging that the trading platform manipulated the clearing process for its own benefit while using confidential customer information. BitMEX plans to terminate operations in September.
The complaint has been filed in the U.S. District Court for the Southern District of New York. In addition to Hayes, the defendants include BitMEX co-founders Samuel Reed and Benjamin Delo, former head of business development Gregory Dwyer, and HDR Global Trading Limited and four affiliated entities.
According to the complaint, BitMEX operated an undisclosed "internal trading department" that was able to obtain customers 'private account information. The plaintiff accused the department of using confidential transaction data to establish positions against customers without the customers 'knowledge.
In addition, the complaint alleges that the trading platform deliberately designed its clearing system to close positions early before necessary time points. The plaintiff believes that after these forced liquidations occurred, the remaining customer collateral eventually flowed into BitMEX's insurance funds.
The lawsuit alleges that secret trading unit misused customer information
The lawsuit alleges that Gregory Dwyer supervised the internal trading unit from BitMEX's Manhattan office throughout 2018. Based on the documents, internal software was able to identify market fluctuations that could trigger the most customer liquidations.
In addition, the plaintiffs argued that BitMEX had assured users that hidden orders and clearing prices were confidential, but they claimed that the internal trading department had unlimited access to this information that customers could not obtain. The lawsuit also alleges that the trading platform influenced prices on third-party reference exchanges, thereby triggering liquidation on BitMEX's derivatives platform.
Another major accusation focuses on March 13, 2020. On the same day, customers were reportedly unable to access the platform for about 25 minutes, while nearly $800 million in leveraged positions were cleared. BitMEX initially blamed the problem on cloud hardware failures and later blamed distributed denial-of-service attacks. But the plaintiff refuted those explanations and claimed that the platform deliberately prevented customers from managing their open positions.
Plaintiff seeks recovery of Bitcoin through proposed class action
BKX Services alleges that it lost approximately 305.8 Bitcoin through 13 liquidations between July and August 2018. David Namdar claimed that between August 2019 and May 2020, a total of approximately 316.9 bitcoins was lost through 14 clear liquidations and at least 69 other transactions.
In addition, the lawsuit includes fraud and restitution claims. The plaintiffs seek to recover the bitcoins they claim BitMEX improperly obtained, rather than just monetary compensation. They also estimate that the proposed class-action lawsuit includes tens of thousands of U.S. customers with total claims of more than $5 million.
The complaint also mentions a similar lawsuit filed in 2020, which ended in voluntary withdrawal (without affecting entity rights) in June 2025. The plaintiffs now contend that the earlier lawsuit suspended the statute of limitations, allowing the latest claim to proceed.
BitMEX announces closure after facing new legal challenges
BitMEX pleaded guilty to violating the Bank Secrecy Act in 2024 and was fined an additional US$100 million in January 2025. The co-founders, including Arthur Hayes, were subsequently pardoned by current U.S. President Donald Trump in March 2025.
Now, Arthur Hayes is again facing legal pressure as former BitMEX clients seek to file a class action lawsuit on allegations of insider trading, market manipulation and improper liquidation. At the same time, BitMEX has confirmed that following a strategic review by the HDR board, the platform will permanently cease operations on September 23. The lawsuit received more attention in the trading platform's final weeks of operations.
