Bitget CEO Criticizes Hyperliquid’s Handling of JELLY Token Incident
Gracy Chen, CEO of Bitget, has harshly criticized Hyperliquid’s response to the JELLY token debacle. After Hyperliquid removed JELLY following a $10.6 million loss and a potential treasury liquidation, Chen called the decentralized exchange’s actions “immature, unethical, and unprofessional.”
Hyperliquid promised to compensate affected users but Chen questioned the exchange’s integrity.She accused the team of operating like an offshore centralized exchange without know-your-customer (KYC) or anti-money-laundering (AML) checks.In a post on X, Chen stated, “Despite claiming to be an innovative DEX, Hyperliquid enables illicit flows and bad actors.”
Arthur Hayes, former CEO of BitMEX, echoed similar concerns. He tweeted that Hyperliquid’s handling of the JELLY incident shows it can’t manage decentralized operations.
The controversy began when a $5 million short bet on JELLY got liquidated, causing a 230% price surge within an hour. This left Hyperliquid with a $10.6 million loss. The platform’s validators delisted JELLY,citing “suspicious market activity.”
Chen warned that Hyperliquid’s decision sets a dangerous precedent. “Trust is the foundation of any exchange,” she said. “Once lost, it’s almost impossible to recover.”
She also highlighted “alarming flaws” in Hyperliquid’s design, such as mixed vaults and unrestricted position sizes, which expose it to manipulation. Chen warned, “Unless these issues are addressed, Hyperliquid risks becoming the next catastrophic failure in crypto.”
Earlier, blockchain sleuth ZachXBT revealed that a Hyperliquid whale using stolen funds made huge high-leverage short bets. The HYPE token fell sharply following the incident.
