Bitget CEO says Hyperliquid could become FTX 2.0 amid JELLY incident

Hyperliquidal management of the jelly token incident sparked strong criticism from Gracy Chen, CEO of Bitget.

After hyperliquid (THRESHING) Deleted jelly in the midst of an estimated loss of $ 10.6 million and a threat of imminent liquidation to its treasure, Chen qualified the actions of decentralized exchange as “immature, contrary to ethics and not professional”.

Hyperliquid has struck the token with a promise to compensate for affected users. However, Chen argued that the losses and the way in which the situation was dealt with raises questions about the integrity of the exchange. She criticized the team for having exploited the DEX “as an offshore centralized exchange without family checks of known or anti-debt customers”.

The director general of Bitget underlined this in a PublishNote:

“Although it presents itself as an innovative decentralized exchange with a daring vision, hyperliquid works more like an offshore CEX without kyc / AML, allowing illicit flows and bad actors.”

As such, Chen estimated that the hyperliquidal behavior can point to an “FTX 2.0”, a reference of the Crypto FTX Crypto exchange, which imploded in 2022 with millions of affected users.

Arthus Hayes, the founder and former CEO of derivatives Exchange Bitmex, also shared a similar socket via X.

Hyperliquid interrupted the Jellyjelly market after a short bet of $ 5 million per merchant was liquidated, throwing the platform into the controversy in the middle of an apparently coordinated pump program.

The sharp increase in Jelly Price, 230% astounding in an hour, left the pool of hyperliquidal liquidity with a loss of $ 10.6 million. Another peak would have exploded at more than $ 240 million. Set of hyperliquid validators chosen to delight The token before that, quoting a “suspicious activity on the market”.

Chen commented:

“The decision to close the jelly market and force the settlement of posts at a favorable price establishes a dangerous precedent. Confidence – not capital – is the basis of any exchange (CEX and Dex), and once lost, it is almost impossible to recover. ”

More than criticizing the delimitation, Chen then stressed what she called “alarming faults” in the design of Dex. Among these are the systemic risk for users as a result of mixed vaults and unrestricted position sizes, which, according to her, have opened it to manipulation.

“Unless these problems are resolved,” she noted, “more altcoins can be armed against hyperliquid-by exceeding it at risk of becoming the next catastrophic failure of crypto.”

Earlier this month, Blockchain Sleuth Zachxbt disclosed That a hyperliquid whale that made huge high -level short effects on the DEX was indeed a cybercriminal which used stolen funds.

The braking token was dived two digits as a result of the incident.