Michaela
Bitget CEO Gracy Chen has criticized Hyperliquid’s handling of JELLY token perpetual futures delisting, citing concerns over suspicious trading activity and centralization.
Chen took to X to criticize Hyperliquid’s handling of the JELLY incident, warning that the platform could be on track to becoming “FTX 2.0.” She described the exchange’s actions as “immature, unethical, and unprofessional,” stating that they caused user losses and raised serious concerns about its integrity.
“Despite presenting itself as an innovative decentralized exchange with a bold vision, Hyperliquid operates more like an offshore CEX with no KYC/AML, enabling illicit flows and bad actors,” Chen wrote.
On Wednesday, Hyperliquid, a blockchain network focused on trading, announced the delisting of perpetual futures contracts for the JELLY token, citing “evidence of suspicious market activity.” The platform stated that affected users would receive reimbursements. The decision was made through consensus among a limited number of validators.
Chen further argued that Hyperliquid’s decision to shut down the JELLY market and forcibly settle positions at a favorable price set a concerning precedent. She stressed that trust, rather than capital, is the core foundation of any exchange—whether centralized or decentralized—and warned that once that trust is broken, regaining it becomes nearly impossible.
While the Bitget CEO did not accuse Hyperliquid of any illegal activity, her comparison to FTX drew significant attention. The now-defunct exchange, once one of the largest in the industry, collapsed in 2022 amid allegations of mismanagement and fraud. Its founder, Sam Bankman-Fried, was later convicted in the United States on multiple charges, including fraud and conspiracy, after it was revealed that billions in customer funds had been misused.
“Moreover, the platform’s product design reveals alarming flaws: mixed vaults that expose users to systemic risk, and unrestricted position sizes that open the door to manipulation. Unless these issues are addressed, more altcoins may be weaponized against Hyperliquid—putting it at risk of becoming the next catastrophic failure in crypto,” Chen further added.
Delisting JELLY Token Perpetual Futures
Hyperliquid, a decentralized perpetual exchange, recently faced turmoil following an alleged market manipulation scheme involving the JELLY token.
The controversy stems from a trader who reportedly held approximately $4.85 million worth of JELLY tokens and executed a strategy that combined a significant short position on Hyperliquid with simultaneous on-chain spot purchases.
This tactic caused the short position to be liquidated, shifting the financial burden to Hyperliquid’s Liquidity Provider (HLP) vault, which absorbed the losses.
The incident has sparked concerns over potential vulnerabilities within decentralized exchanges and whether existing safeguards are sufficient to prevent such trading strategies from destabilizing the platform.
The event has raised concerns about the exchange’s ability to handle market manipulation and has sparked discussions about the effectiveness of risk management on decentralized trading platforms.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
