Celsius estate pursues $495 million BitMEX claim before trading ends

Blockchain Recovery Investment Consortium filed a complaint in the U.S. Bankruptcy Court for the Southern District of New York on Sept. 12, seeking the return of 6,360 bitcoin. The estate alleges fraud and market manipulation during the March 2020 crash, valuing the claim at roughly $495 million. The suit targets five BitMEX entities spanning Bermuda, the Cayman Islands, England, Hong Kong, the Seychelles, and the U.S.

The core of the claim is a leveraged long position that conflicts with Celsius's own disclosures. A July 2022 bankruptcy filing stated the firm ran "several highly speculative derivative and asset deployment mechanisms." That finding appeared in the court-appointed examiner's final report. Celsius lost 1,325.84 BTC in a single liquidation on March 12, 2020. Investment fund JST lost 5,034.33 BTC the following day, with claims assigned to the estate.

"BitMEX intentionally designed its platform and liquidation procedures to cause liquidations of collateral and defraud its own customers," the filing says.

BitMEX stops trading Sept. 23. The estate has 11 days to act against a defendant that is winding down. This is the second suit filed against the exchange since it announced the shutdown in July. The allegations remain unproven. A leveraged long funded from a pooled customer book matches the position types described in the 2022 filings. The timing creates a constraint for the estate as it moves through the Southern District of New York.