Bitget CEO Warns: Could Hyperliquid Become "FTX 2.0"? Decentralized Exchange Faces Trust Crisis
Cryptocurrency exchange Hyperliquid recently caused a stir in the industry due to its handling of market manipulation incidents involving the JELLY token. Bitget CEO Gracy Chen bluntly warned that the platform could become the "next FTX", pointing out serious flaws in its operating model.
The incident originated on March 26, when Hyperliquid suddenly decided to delist the JELLY futures contract after discovering suspicious trading. Although it promised to compensate users, the decision-making process was completed by a few validators, raising doubts about its commitment to "decentralization".
Even more concerning is that this is the second similar crisis the platform has faced in a short period. On March 12, Hyperliquid suffered a loss of $4 million when a whale manipulated and cashed out a $340 million ETH long position, leading to significant losses for the exchange during the liquidation.
Chen sharply pointed out: "Hyperliquid claims to be decentralized, but in reality operates like an offshore centralized exchange without KYC/AML." She specifically criticized its hybrid vault design, arguing that it exposes all users to collective risk. BitMEX co-founder Arthur Hayes also joined the criticism, calling for the industry to face this issue.
According to analysts, in this incident, a trader utilized three accounts to manipulate the JELLY price, first driving it up by 400%, then profiting from a system loophole. Although Hyperliquid eventually restricted account operations, the damage had already been done.
This inevitably brings to mind the warning from former SEC Chairman Gary Gensler: "Many so-called decentralized platforms actually require more regulation than traditional exchanges." When exchanges operate without KYC/AML mechanisms, when key decisions are controlled by a few individuals, and when investor protection mechanisms are nominal rather than real-time, these self-proclaimed "decentralized" protocols have clearly deviated from the original intent of blockchain.
Conclusion:
After the FTX incident, institutional investors' preference for licensed exchanges has significantly increased. Similar incidents like Hyperliquid's could further exacerbate this trend. After all, in the face of real monetary investment, idealism must ultimately yield to risk control.
This recent occurrence raises questions about whether DeFi platforms are truly ready to meet the regulatory requirements of the mainstream financial world. How do you think DeFi platforms should balance innovation and regulation?
