The £20m BitMEX Claim Explained: Can UK Traders Undo Losses on Offshore Exchanges?

A UK software engineer, Lewis Barber, has filed a High Court claim alleging that BitMEX's operator sold him crypto derivatives without FCA authorisation, and he wants 324.8 bitcoin back, valued at about £20.4m on 1 October 2026. His case relies on section 26 of FSMA, which can make agreements with unauthorised firms unenforceable. Nothing has been decided, and BitMEX says the claim hasn't been served.

The story was first reported by the Guardian on 14 October. It's unusual, because Barber isn't saying he was cheated on individual trades. His argument, as reported, is that BitMEX was never allowed to deal with him in the first place. If that kind of argument works, it matters to a lot more people than one trader.

What is the BitMEX £20m claim about?

According to Decrypt, which reviewed the particulars of claim, Barber placed around 2,294 trades on BitMEX from five accounts between 2018 and 2022. He challenges the 1,053 that lost money, all perpetual swaps. He's suing HDR Global Trading Limited, the Seychelles-registered operator, for the bitcoin or equivalent damages.

The claim also alleges deceit, on the basis that BitMEX implicitly represented it could lawfully trade with him. It points to the fact that UK users could select the UK as their country of residence, and to global promotions including a January 2019 advert in The Times. A BitMEX spokesperson told the Guardian: "No such claim has been served on HDR Global Trading Limited." These are allegations only. No defence has been filed and no court has ruled on any of it.

BitMEX stopped trading on 23 September 2026 after announcing a wind-down in July, though withdrawals remain open. HDR Global Trading pleaded guilty in the US to a Bank Secrecy Act violation in 2024 and was ordered to pay $100m in January 2025. That US case was about anti-money-laundering controls, not UK authorisation, and it doesn't prove anything about this claim.

Photo: David Hillas, CC BY-SA 2.0, via Wikimedia Commons

What does section 26 of FSMA actually say?

Section 26 says an agreement made by a person carrying on a regulated activity in breach of the "general prohibition" (doing regulated business in the UK without authorisation or exemption) is unenforceable against the other party. That other party can recover money or property they handed over, plus compensation for losses from parting with it.

The general prohibition sits in section 19 of FSMA. Section 26 is the civil consequence: the customer can walk away from the deal. It doesn't apply to deposit-taking, and it only covers agreements whose making or performance is part of the regulated activity in question.

To win, a claimant would broadly need to show three things. The products were specified investments (derivatives such as futures or contracts for differences generally are, even when the underlying asset is bitcoin). The firm was carrying on that activity in the UK, by way of business. And it had no authorisation or exemption. That middle point is where offshore cases usually get fought, because an exchange based abroad will typically argue it wasn't operating in the UK at all.

The FCA's warning list helps the claimant's story but doesn't settle it. On 20 March 2020, the FCA added BitMEX, saying "we believe this firm may be providing financial services or products in the UK without our authorisation." "May be" is not a finding.

FSMA provision	What it does	Why it matters in a claim like this
Section 19	Bans regulated activity in the UK without authorisation or exemption	The breach a claimant must prove
Section 26(1)	Makes the agreement unenforceable against the customer	Lets the customer refuse the bargain
Section 26(2)	Customer recovers money or property paid, plus compensation	Basis for asking for the bitcoin back
Section 28(3)	Court may enforce the deal anyway if just and equitable	The firm's main escape route
Section 28(5)	Court considers whether the firm reasonably believed it wasn't breaching the ban	Focus on the firm's state of mind
Section 28(7)	Customer must repay money or return property received under the agreement	Recovery isn't one-way

Can a court still let the firm keep the money?

Yes. Section 28 lets the court enforce the agreement, or let the firm keep what it received, if it's satisfied that's just and equitable. For a section 26 case, the court must consider whether the firm reasonably believed it wasn't breaking the general prohibition. So recovery isn't automatic, even if a breach is proven.

There's a second catch in section 28(7). A person who refuses to perform or recovers under these provisions must repay money and return property they received under the agreement. Barber is reportedly challenging only his losing trades. Whether each perpetual swap counts as a separate agreement, so that winners and losers can be treated differently, is exactly the kind of question a judge will have to answer. My view, for what it's worth, is that this is the weakest-looking part of the case on paper and the most interesting legal point in it.

What could this mean for other UK users of offshore exchanges?

Possibly a lot, but nothing yet. If a court accepted that an offshore exchange was dealing with UK retail customers without authorisation, others with similar trading histories might bring similar claims. Barber's solicitors, Seladore Legal, suggest the total could reach hundreds of millions of pounds, though that's the claimant's own lawyers talking.

This isn't the only case testing the idea. In June 2026, nearly 1,700 UK retail investors filed a High Court claim against Binance and Changpeng Zhao seeking up to £150m, alleging Binance offered derivatives to UK customers without FCA authorisation. Binance says it will defend the claims.

Timing matters too. The FCA banned the sale of crypto derivatives to UK retail consumers from 6 January 2021. Barber's trades reportedly span 2018 to 2022, so the period runs both sides of that ban. Limitation rules (how long you have to sue) will also be in play for older trades, and they can be technical.

If you traded derivatives on an offshore platform, don't assume you have a claim. Seladore partner Gareth Keillor told Decrypt that whether anyone has a claim depends on their specific facts and trading history. Be wary of "no win, no fee" crypto recovery firms that cold-call you after headlines like this; our guide to crypto recovery scams explains how they work.

Frequently asked questions

Is BitMEX being sued in the UK? A claim has been filed in the High Court in London by UK trader Lewis Barber against HDR Global Trading Limited, BitMEX's operator, seeking 324.8 BTC or equivalent damages. BitMEX says it hasn't been served. The allegations haven't been tested in court.

What is section 26 of FSMA? It makes an agreement unenforceable against the customer where the firm made it while carrying on a regulated activity without authorisation or exemption. The customer can recover money or property paid and compensation for related losses, subject to the court's discretion under section 28.

Can I get my crypto losses back from an unregulated exchange? Possibly, in narrow circumstances, but it isn't automatic. You'd need to show the firm carried on a regulated activity in the UK without authorisation, and the court can still enforce the deal if that's just and equitable. Get independent legal advice before paying anyone.

Was BitMEX authorised by the FCA? No. The FCA placed BitMEX on its warning list on 20 March 2020, saying it believed the firm may be providing services in the UK without authorisation. That's a warning, not a court finding that the law was broken.

Is BitMEX still operating? BitMEX stopped trading on 23 September 2026 after announcing a wind-down in July 2026. Withdrawals remained available after the closure, and reports say maintenance fees apply to balances left on the platform.

What to do now

If you still have money on BitMEX, withdraw it and keep your full trade history, because exports can disappear when platforms wind down. Check any exchange you use against the FCA register and warning list before you deposit. See our guides on what happens if an exchange goes bust, how to spot a fake or unauthorised exchange and when the Financial Ombudsman can help. This isn't legal advice.