27-3-2025 – Gracy Chen, the formidable chief of crypto exchange Bitget, has unleashed a blistering rebuke against blockchain network Hyperliquid, accusing it of mishandling a trading fiasco involving the JELLY token. In a stark warning, she suggested the platform risks spiralling into an “FTX 2.0” if it continues down its current path. Her critique erupted after Hyperliquid abruptly axed perpetual futures linked to JELLY on March 26, pledging to compensate users caught in what it labelled “suspicious market activity.” The episode saw a cunning trader exploit the system—opening a $6 million short position before artificially pumping JELLY’s on-chain price, triggering their own liquidation.
Chen didn’t mince words, branding Hyperliquid’s decision to forcibly settle open positions as “immature” and “unethical.” She argued that such heavy-handed interference threatens the very trust that underpins any exchange. “Capital might fuel the machine, but trust keeps it running,” she declared. “Lose that, and you’re fighting a losing battle.” The move, swiftly agreed upon by a mere eight validators, has sparked wider unease about the network’s governance—particularly its claim to be a decentralised bastion in a world of centralised trading giants.
#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 casting serious doubts over its integrity. Despite presenting itself as an innovative decentralized exchange with a…
— Gracy Chen @Bitget (@GracyBitget) March 26, 2025
Hyperliquid’s dominance in perpetuals trading, where it commands a hefty 70% market share, amplifies the stakes. Yet its thin validator pool—eight, a stark contrast to Ethereum’s near-million-strong army—has drawn sharp scrutiny. BitMEX co-founder Arthur Hayes weighed in, suggesting traders might shrug off the detail, though he couldn’t resist pointing out the irony in Hyperliquid’s decentralisation pitch. Critics fear this concentration of power leaves the door ajar for insider meddling, undermining its lofty ideals.
The JELLY debacle isn’t Hyperliquid’s first brush with turbulence. Just weeks earlier, on March 12, an Ether liquidation drained $4 million from its liquidity pool, prompting a hike in margin requirements. Now, the platform finds itself at a crossroads, its response to the JELLY manipulation exposing the tightrope walk between safeguarding users and honouring the decentralised ethos.
