Celsius debtors sue BitMEX over 2020 bitcoin liquidation after Mashinsky's denial

Celsius Network's debtors filed a lawsuit against crypto exchange BitMEX on September 12. BitMEX is scheduled to shut down on September 23, and the debtors are now seeking more than $100 million before that closure.

The allegations specifically claim that BitMEX wrongfully liquidated and seized Celsius' bitcoin during the COVID-19 market crash around March 12, 2020.

A day following that liquidation, Celsius CEO Alex Mashinsky promised that the firm was not involved in any trading.

“Fortunately, Celsius is not a trader,” Mashinsky declared on March 13.

Commenting on the COVID crash that had occurred one day prior, he added, “We don’t trade. We don’t buy and sell coins. We don’t decide, oh, BTC’s going up or down.”

He also gushed about Celsius’ supposedly wonderful performance. “We started charging higher and higher rates, earning more money for the community,” Mashinsky claimed, in reference to Celsius’ non-trading, lending division.

“So, we did exceptionally well last night. Again, credit goes to the team for putting together an amazing performance.”

Celsius’ BTC derivative trading on BitMEX

Mashinsky is now serving a prison sentence, yet stories about Celsius continue to emerge.

This month, Celsius debtors stated that contrary to Mashinsky's assertion of no trading, Celsius indeed held a leveraged long position in XBTM20. BitMEX liquidated that position on March 12, 2020, which the debtors describe as part of a “fraudulent scheme to defraud its own customers.”

Celsius traded XBTM20, a leveraged derivative tied to bitcoin's price, on BitMEX.

The debtors did not disclose the exact leverage Celsius employed, but BitMEX was known at the time for offering up to 100x leverage on its bitcoin derivatives.

According to the debtors, BitMEX's “fraudulent misconduct” and “wrongful liquidation” of Celsius's XBTM20 position enabled BitMEX to take possession of the bitcoin that had served as collateral.

In short, the debtors assert that BitMEX manipulated its own liquidation mechanism.

Celsius debtors argue that the loss was BitMEX's responsibility, not a result of the leveraged trading that Mashinsky had previously denied occurring on his YouTube broadcast.

On March 12, 2020, BitMEX handled more than $700 million in liquidations, with over 90% being forced closures of long positions.

BitMEX had earlier announced on July 23, 2026 that it would shut down, advising users to withdraw funds before business ends. As of August 26, it stopped accepting new position openings, and it intends to cease all exchange services on September 23 at 04:00 UTC.