Bitget CEO Gracy Chen Has Criticized Hyperliquid's Handling of JELLY Token Perpetual Futures Delisting

Bitget CEO Gracy Chen has criticized Hyperliquid's handling of JELLY token perpetual futures delisting, citing concerns over suspicious trading activity and centralization.

Bitget CEO Gracy Chen has slammed Hyperliquid for its handling of the JELLY token perpetual futures delisting, which she claims could see the decentralized exchange become "FTX 2.0."

Chen took to X to criticize Hyperliquid’s actions as immature, unethical, and unprofessional. She added that they triggered user losses and capabilities.

“#Hyperliquid may be on track to become #FTX 2.0. The way it handled the $JELLY incident was immature, unethical, and unprofessional, triggering user losses and putting a huge question mark on its integrity. Despite presenting itself as an innovative decentralised exchange with a bold vision, Hyperliquid operates more like an offshore CEX with no KYC/AML, enabling illicit flows and bad actors.

"And the way it hastily shut down the JELLY market and forcibly settled positions at a favorable price to liquidate a single user’s position sets a dangerous precedent. Let’s face facts: trust, not capital, is the foundation of any exchange, centralised or decentralised. Once that trust is broken, it’s nearly impossible to restore.

"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.”

Earlier this week, Hyperliquid announced the delisting of perpetual futures contracts for the JELLY token following the detection of suspicious market activity. The platform stated that affected users will receive reimbursements. The decision was made through a consensus vote among a limited number of validators on the Hyperliquid network.

However, Chen argued that the exchange’s actions were irresponsible and could have disastrous consequences for the broader cryptocurrency industry.

The incident began when a trader took a large short position on JELLY futures on Hyperliquid, while simultaneously purchasing the token in the spot market. This strategy was designed to capitalize on any price movements in the token.

However, as the trader’s short position was liquidated, the financial burden shifted to Hyperliquid’s Liquidity Provider (HLP) vault, which ultimately absorbed the losses.

The rapid series of events unfolded on Wednesday, culminating in a vote by the validator set to delist JELLY perps.

According to a statement by Hyperliquid, all users—excluding flagged addresses—will receive full recovery from the Hyper Foundation. The statement added that the on-chain data will be used to identify and credit users accordingly in the coming days.

According to reports, the trader had an outstanding position of about $4.85 million in JELLY futures on Hyperliquid. The trader was liquidised on Wednesday morning, with HLP vault taking the loss.

The post Bitget CEO slams Hyperliquid over handling of JELLY token futures delisting, says it may become ‘FTX 2.0’ appeared first on CryptoSlate.

uuid: 37706780-c667-4463-9208-682474430675

slug: bitget-ceo-slams-hyperliquid-over-handling-of-jelly-token-futures-delisting-says-it-may-become-'ftx-2.0'

status: published

createdAt: 2023-08-24T12:53:16.337Z

publishedAt: 2023-08-24T12:53:16.337Z

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