Celsius Network's bankruptcy estate has filed a lawsuit against cryptocurrency derivatives exchange BitMEX seeking $495 million, alleging that liquidations during the March 2020 Covid-driven market crash cost the failed lender roughly 6,360 bitcoin.
The Claim Behind the Lawsuit
The Celsius estate is pursuing recovery of assets it says were wiped out when leveraged positions were liquidated during the violent sell-off that gripped crypto markets in early 2020. At the time, bitcoin plunged sharply as global markets convulsed over the emerging pandemic, triggering cascading liquidations across leveraged trading platforms.
The suit centers on a leveraged long position that the estate says was held on BitMEX and forcibly closed during the crash. Recovering the disputed 6,360 BTC would represent a significant windfall for creditors still awaiting distributions from the collapsed lender's estate.
A leveraged long bet sits awkwardly beside a company that sold itself on being delta-neutral.
Tension With Celsius's Marketing
The legal action highlights an uncomfortable contradiction in how Celsius presented itself to customers. The company marketed its yield products as relatively safe, leaning on messaging that suggested a delta-neutral approach designed to avoid directional exposure to price swings.
A leveraged long position, by contrast, is a directional bet that profits when prices rise and suffers heavily when they fall — precisely the kind of exposure that inflicted losses during the 2020 crash. That mismatch between public messaging and actual trading activity has become a recurring theme in the fallout from Celsius's 2022 failure.
Key points from the filing include:
- The estate is seeking to recover approximately 6,360 BTC lost in the March 2020 downturn
- The total claim is valued at around $495 million
- The disputed position was a leveraged long, at odds with delta-neutral branding
Celsius filed for bankruptcy in 2022 after freezing customer withdrawals, and its estate has since pursued numerous legal avenues to claw back funds on behalf of creditors. The BitMEX suit is the latest effort to reclaim value tied to the lender's earlier trading operations.