Is Hyperliquid the next FTX? JELLY drama triggers Bitget CEO warning

Key Takeaways

• Bitget's CEO has issued a warning about the potential risks at Hyperliquid after a major incident involving the JELLY token.
• Hyperliquid faces criticism for its handling of the JELLY incident, with concerns about its operational structure and user safety.

Bitget’s CEO, Gracy Chen, warned today about potential risks at crypto trading platform Hyperliquid following controversial handling of the JELLY token incident.

The platform faced turmoil after a trader opened and deliberately self-liquidated a $6 million short position on JellyJelly, forcing Hyperliquid to absorb substantial losses.

The token’s market cap surged from approximately $10 million to over $50 million in under an hour due to the forced squeeze.

The CEO criticized Hyperliquid’s operational structure, stating:

“Despite presenting itself as an innovative decentralized exchange with a bold vision, Hyperliquid operates more like an offshore CEX with no KYC/AML, enabling illicit flows and bad actors.”

The Bitget CEO highlighted structural concerns about Hyperliquid’s platform, including “mixed vaults that expose users to systemic risk, and unrestricted position sizes that open the door to manipulation.”

Binance announced plans to list JELLY perpetual futures amid the controversy, which some users interpreted as a move to target Hyperliquid’s position.

The token has risen 62% in the past 24 hours, while Hyperliquid’s HYPE token has fallen 14.4%, according to CoinGecko data.