UK Trader Files BitMEX Lawsuit Seeking £20.4 Million Over 1,053 Losing Trades

A BitMEX lawsuit filed by British software engineer Lewis Barber is seeking 324.8 Bitcoin or equivalent damages from HDR Global Trading Limited, the operator of BitMEX, according to a claim reviewed by the Guardian. As of October 1, the claim is valued at £20.4 million. The lawsuit challenges 1,053 losing trades out of approximately 2,294 trades Barber placed on BitMEX through five accounts between 2018 and 2022.

Barber argues that BitMEX entered into the disputed perpetual swaps without the authorisation required in the UK. He relies on Section 26 of the Financial Services and Markets Act 2000, which allows a customer to seek the return of money or property transferred under an agreement made during unauthorised regulated activity. However, he applies this argument only to the 1,053 losing trades, rather than seeking to unwind all transactions on his accounts.

The court has not yet decided whether Section 26 covers those trades or how much Barber could recover. Even if an authorisation breach is proven, Section 28 permits a court to enforce the agreement or allow the provider to keep the transferred property if it considers that just and equitable.

BitMEX Lawsuit Turns on the Exchange's UK Activity

For Barber’s argument to succeed, the court must also consider BitMEX’s activity in the UK. In March 2020, while Barber was still trading, the Financial Conduct Authority warned that BitMEX might be providing financial services or products in the UK without authorisation. That warning did not determine whether Barber’s particular trades breached UK rules; the question remains part of his case.

Barber’s lawyers at Seladore Legal are inviting other former UK-based BitMEX clients to register their interest. The firm says it will assess each person’s trading history and circumstances before deciding whether they have a potential claim.

Barber is not the only UK crypto-derivatives customer pursuing an authorisation-based claim. A separate lawsuit brought by 1,692 traders alleges that Binance sold them derivatives it was not authorised to offer. Neither case has established liability for the exchange concerned.