Bitget CEO Claims Hyperliquid Could Become FTX Following Jelly Jelly Saga

Ronny Mugendi
March 27, 2025
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Bitget CEO Claims Hyperliquid Could Become FTX Following Jelly Jelly Saga

Highlights

  • Bitget CEO warns Hyperliquid could become "FTX 2.0" after $10.6M loss from JELLY incident and forced market closure.
  • Hyperliquid forcefully settled $JELLY trades, favoring some users and triggering widespread losses.
  • Gracy Chen criticizes Hyperliquid’s lack of KYC/AML, calling its DEX model unethical and vulnerable to manipulation.

The decentralized exchange Hyperliquid is facing scrutiny following its handling of the JELLY token market, raising concerns from industry leaders. Bitget CEO Gracy Chen compared Hyperliquid to the now-defunct exchange FTX after Hyperliquid’s response to unusual activity involving the JELLY token resulted in an estimated $10.6 million loss. The delisting of the token and forced settlement of open positions drew sharp reactions from the crypto community.

Advertisement
Advertisement

Bitget CEO Warns Hyperliquid May Mirror FTX Collapse

In a recent post on X, Bitget CEO Gracy Chen warned that Hyperliquid could follow a similar trajectory to FTX. Chen raised alarms over the platform’s decision to halt the trading of the JELLY token and forcefully settle open trades. According to her, this action created unfair outcomes, favoring some traders while causing losses to others.

Bitget CEO labeled Hyperliquid’s actions as immature and unethical. The forced closure followed a 230% spike in JELLY price within one hour. A $5 million short position was liquidated during this time, raising concerns about market manipulation. The situation placed Hyperliquid’s treasury at further risk, with potential exposure reportedly nearing $240 million.

Gracy Chen added,

“Unless these issues are addressed, more altcoins may be weaponized against Hyperliquid—putting it at risk of becoming the next catastrophic failure in crypto.”

A recent report highlighted how Hyperliquid Vault is at risk of losing its entire $230 million fund due to a surge in the Solana-based memecoin JELLY JELLY. The platform inherited a short position amid a short squeeze and now faces mounting pressure as the token’s price continues to climb.

Advertisement
Advertisement

Concerns Over Compliance and Risk Structure

Bitget CEO continued to criticize Hyperliquid’s lack of standard compliance practices. She pointed out the absence of Know-Your-Customer (KYC) and Anti-Money Laundering (AML) measures. Chen stated that Hyperliquid, although presenting itself as a decentralized platform, operated similarly to an offshore centralized exchange.

She added that this regulatory gap may allow illicit funds to move through the platform undetected. These concerns were echoed by others in the industry, including former BitMEX CEO Arthur Hayes. Chen also warned that if left unchecked, the model could lead to the same vulnerabilities that contributed to the collapse of FTX.

Advertisement
Advertisement

Mixed Vaults and Position Sizes Raise Risk

The Bitget CEO highlighted structural concerns with the platform’s product design. She noted that the use of mixed vaults exposed users to shared risks. According to Chen, this could allow the actions of a few traders to affect all users on the platform.

The JELLY token’s sharp price rise triggered emergency action from the exchange’s validator set. The platform cited suspicious market activity as the reason for delisting the token. However, the decision to settle trades at a specific price led to a backlash from affected traders.

Bitget CEO described the settlement approach as a dangerous precedent. She stressed that trust, not just capital, is essential for the success of any exchange. Without addressing these vulnerabilities, Chen warned that Hyperliquid could face further threats from manipulated markets.

Meanwhile, FTX bankruptcy case expenses reached nearly $1 billion, with legal and advisory firms receiving substantial payouts. Court records show that Sullivan & Cromwell LLP alone has earned over $248 million for handling the proceedings.

Advertisement
coingape google news coingape google news
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.