The bankruptcy estate of failed crypto lender Celsius has filed a lawsuit against derivatives exchange BitMEX, accusing the platform of improperly liquidating and seizing thousands of Bitcoin during the market turmoil of March 2020. The legal action arrives as BitMEX prepares to wind down its trading operations.
The Allegations
According to the Celsius estate, BitMEX wrongfully liquidated and confiscated roughly 6,360 BTC belonging to the lender during the dramatic price collapse that struck crypto markets in early 2020. At current valuations, that stash of Bitcoin would be worth close to $490 million.
The March 2020 crash, often referred to as "Black Thursday," saw crypto prices plunge as global markets reeled from the onset of the COVID-19 pandemic. During that period of extreme volatility, numerous leveraged positions across exchanges were forcibly closed as prices whipsawed.
The estate contends that BitMEX's handling of Celsius' positions during the sell-off was improper, forming the basis for its claim to recover the assets.
The Celsius estate is chasing nearly half a billion dollars in Bitcoin it says was seized during crypto's darkest day.
A Reckoning for Both Firms
The timing of the lawsuit is notable, landing as BitMEX moves toward closing its exchange business. The dispute revisits events that unfolded more than five years ago, underscoring how long the fallout from the 2020 crash continues to ripple through the industry.
Celsius, once one of the largest crypto lending platforms, collapsed into bankruptcy in 2022 amid the broader market downturn. Since then, its estate has pursued various claims and recoveries to compensate creditors who lost funds when the lender froze withdrawals and imploded.
Key points at a glance:
- The disputed amount totals 6,360 BTC, worth nearly $490 million today.
- The liquidation allegedly occurred during the March 2020 crash.
- The suit comes as BitMEX prepares to shut down its exchange.
Recovering these assets could provide a meaningful boost to Celsius creditors still awaiting repayment, though the litigation is likely to face a lengthy legal process before any resolution is reached.