Woofun AI reports that BKX Services Inc. and David Namdar have filed a lawsuit against BitMEX, alleging the exchange seized 622 Bitcoin through misconduct. The core accusation centers on the platform’s use of server freezes and internal trading advantages to execute flawed liquidations, with CEO Peter Wilkinson publicly dismissing the claims as spurious.

The plaintiffs quantify their losses at 305.809 BTC for BKX Services Inc. in 2018 and 316.856 BTC for David Namdar between 2019 and 2020. Rather than seeking monetary compensation, the suit demands the return of the actual coins under claims for replevin and fraud.

Woofun AI data shows the complaint alleges BitMEX transferred excess collateral to its Insurance Fund instead of returning it to traders.

Structurally, the filing alleges BitMEX’s liquidation engine closed positions when unrealized losses reached only half of the posted collateral. This mechanism left collateral worth roughly twice the losses, which was then seized.

Furthermore, an undisclosed internal trading desk allegedly accessed customer positions, hidden orders, and liquidation points. It reportedly used anonymized accounts to trade during server freezes that locked ordinary customers out, while also trading on reference exchanges to induce price moves that triggered liquidations.

These allegations have not been proven in court, though the case revisits conduct from a 2020 class action under the Commodity Exchange Act. That prior suit was voluntarily dismissed without prejudice in June 2025, without a ruling on the merits. The new action argues that the earlier case paused the applicable limitations period, allowing this fresh claim for fraud and replevin to proceed.