Celsius began sending 350 Bitcoin to BitMEX at 23:47:07 UTC on March 12, 2020, as additional margin for a long XBTM20 futures position. Eight minutes later, BitMEX had placed a liquidation order on the position, according to a lawsuit filed by the Celsius estate in the U.S. Bankruptcy Court for the Southern District of New York.
- The Celsius bankruptcy estate sues BitMEX to recover 6,360 Bitcoin lost during disputed March 2020 derivatives market liquidations.
- BitMEX triggered liquidation protocols within eight minutes of an unconfirmed 350 BTC deposit arriving in company transaction queues.
- Litigation targets BitMEX insurance fund mechanisms eleven days before the derivatives trading platform permanently shutters global exchange operations.
The complaint, filed September 12, 2026, by Celsius Network Limited and Celsius Network LLC through Blockchain Recovery Investment Consortium, the estate’s litigation administrator, says BitMEX emailed at 23:52:30 that it had seen the incoming transfer but that it remained unconfirmed. The email said confirmation normally took 10 to 20 minutes or longer.
At 23:54:26, the contract’s mark price crossed the maintenance-margin threshold of $4,020.5. Seven seconds later, BitMEX placed the liquidation order, the complaint says. The position was liquidated at an average price of $3,634.50, producing a claimed loss of 1,325.8385 BTC.
The 350 BTC transfer confirmed on-chain at about 23:55, after liquidation had begun. A separate BitMEX credit to the account is alleged to have occurred at 00:01:28 UTC.
The estate argues that BitMEX had seen the incoming collateral but liquidated the position before the deposit was confirmed and credited. That allegation has not been tested in court.
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→ Submit a Press ReleaseA Second Position Was Liquidated for 5,034 Bitcoin
At 02:50:28 UTC on March 13, a position held through JST Alpha 1 was liquidated at an average price of $3,062.61, according to the complaint. The claimed loss was 5,034.3281 BTC.
JST Alpha 1 Ltd. was a Cayman Islands feeder fund for JST Alpha 1 Master Fund Ltd., managed by JST Asset Management LLC. Celsius had subscribed into the feeder. The estate says the trading was conducted on Celsius’s behalf.
The complaint points to a price gap in the same minute as the liquidation. It says the best ask was $4,502 while the mark price used for the liquidation was $3,422. The estate says that print could not be rationally explained by trading.
Both Cayman funds were struck off the Cayman Islands General Registry on January 31, 2022. On April 23, 2025, JST Alpha 1 Ltd., JST Alpha 1 Master Fund Ltd., and JST Asset Management LLC assigned their claims relating to the losses to Celsius Network Limited and Celsius Network LLC.
The two liquidations total 6,360.1666 BTC.
Mashinsky Said Celsius Was Not a Trader
Later on March 13, after both positions had already been liquidated, Celsius founder and former CEO Alex Mashinsky recorded a market commentary video in which he told viewers Celsius was “not a trader.”
“We don’t trade. We don’t buy and sell coins. We don’t decide, oh, BTC’s going up or down,” Mashinsky said.
The estate is now suing over a directional BitMEX Bitcoin futures position held during that market collapse. The complaint does not establish who authorized that particular trade.
Mashinsky later pleaded guilty to commodities and securities fraud and was sentenced to 12 years in prison in May 2025. The Justice Department said his fraud involved misleading Celsius customers and manipulating the price of its CEL token.
The Insurance Fund Is Part of the Claim
The estate is also seeking disgorgement of profits it says were attributable to the challenged liquidations.
BitMEX said in a March 22, 2020 explanation that its insurance fund grew by 4,457 XBT during the March 12–13 market event and reached an intraday peak of 37,836 XBT. BitMEX said the liquidation engine exited some positions above their average entry price, adding to the insurance fund, and that the fund could also absorb losses.
The estate argues that the system gave BitMEX an economic interest in the disputed liquidations and asks the court to return the 6,360.1666 BTC or its value, along with disgorgement and other damages. Those are claims for relief, not findings that BitMEX manipulated the market or improperly took Celsius’s assets.
The defendants are HDR Global Trading Limited, ABS Global Trading Limited, 100x Holdings Limited, Shine Effort Inc. Limited, and HDR Global Services (Bermuda) Limited.
BitMEX is due to close its exchange operations on September 23, 2026, at 04:00 UTC. Since August 26, users have been restricted to reducing positions, with all remaining positions scheduled to be force-closed at closure.
The Celsius complaint was filed 11 days before that shutdown. The allegations remain untested in court.
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