On September 12, Celsius Network debtors sued crypto exchange BitMEX, which is set to close on September 23. Celsius’ debtors suddenly want over $100 million before BitMEX shuts its doors.
Specifically, the debtors allege wrongful liquidation and seizure by BitMEX of Celsius’ BTC around the March 12, 2020 COVID market crash.
One day after that liquidation, Celsius CEO Alex Mashinsky promised that Celsius wasn’t trading at all.
“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.”
Read more: The many misrepresentations of Alex Mashinsky
Celsius’ BTC derivative trading on BitMEX
Mashinsky is currently in prison but wild tales about Celsius continue.
According to Celsius debtors this month, contrary to Mashinsky’s non-trading claim, Celsius definitely had a leveraged long position in XBTM20 that BitMEX liquidated on March 12, 2020 as part of a “fraudulent scheme to defraud its own customers.”
XBTM20 was a leveraged derivative linked to the price of BTC that Celsius traded on BitMEX.
Although the debtors didn’t specify the financial leverage that Celsius was using, BitMEX famously offered up to 100x price exposure on its BTC derivatives around that time.
The debtors allege BitMEX’s “fraudulent misconduct” and “wrongful liquidation” of Celsius’ XBTM20 position allowed BitMEX to seize Celsius’ BTC that collateralized its trading position.
In essence, debtors claim BitMEX rigged its own liquidation engine.
The loss, Celsius debtors claim, was BitMEX’s fault, not the leveraged trading activity that Mashinsky told his YouTube audience Celsius didn’t conduct in the first place.
On March 12, 2020, BitMEX processed over $700 million worth of liquidations. Over 90% were forced closures of long derivatives.
BitMEX has already announced as of July 23, 2026 that it will close, encouraging users to withdraw their funds prior to the end of business. It has already stopped accepting trades to open new positions as of August 26, and plans to end exchange services entirely on September 23 at 04:00 UTC.
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