Key Takeaways:
- Bitget CEO Gracy Chen warned Hyperliquid could become “FTX 2.0” due to centralized governance and questionable handling of the JELLY token incident.
- Hyperliquid delisted JELLY perpetuals and reimbursed users after alleged market manipulation, sparking criticism over forced settlements and lack of KYC/AML.
- Despite dominating the leveraged perpetuals market, Hyperliquid faces scrutiny over its minimal validator set and structural vulnerabilities.
Bitget CEO Gracy Chen has strongly criticized Hyperliquid, a decentralized trading platform, over its handling of the JELLY token controversy, warning it risks becoming “FTX 2.0.”
On March 26, Hyperliquid delisted JELLY perpetual futures and reimbursed users after detecting suspicious trading activity.
#Hyperliquid may be on track to become #FTX 2.0.
— Gracy Chen @Bitget (@GracyBitget) March 26, 2025
The way it handled the $JELLY incident was immature, unethical, and unprofessional, triggering user losses and casting serious doubts over its integrity. Despite presenting itself as an innovative decentralized exchange with a…
This followed an incident where a trader allegedly manipulated the token’s price to profit from a $6 million short position.
Chen slammed Hyperliquid’s response as “immature” and “unethical,” arguing its centralized validator structure and lack of compliance measures undermine trust—essential for any exchange.
After evidence of suspicious market activity, the validator set convened and voted to delist JELLY perps.
— Hyperliquid (@HyperliquidX) March 26, 2025
All users apart from flagged addresses will be made whole from the Hyper Foundation. This will be done automatically in the coming days based on onchain data. There is no…
The JELLY token, launched by Venmo co-founder Iqram Magdon-Ismail as part of a Web3 social media project, initially surged to a $250 million market cap before crashing.
A brief rebound occurred on the day of the incident due to Binance listing JELLY futures.
Critics, including AP Collective’s founder and BitMEX’s Arthur Hayes, highlighted issues around market manipulation and Hyperliquid’s lack of true decentralization.
$HYPE can’t handle the $JELLY
— Arthur Hayes (@CryptoHayes) March 26, 2025
Let’s stop pretending hyperliquid is decentralised
And then stop pretending traders actually give a fuck
Bet you $HYPE is back where is started in short order cause degens gonna degen
Hyperliquid had already faced backlash earlier in March after a $200 million Ether position was deliberately liquidated, triggering millions in losses.
Despite holding a dominant 70% market share in perpetuals, the platform’s small validator set and risk-prone design have sparked calls for reform to avoid future collapse.
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