Binance vs. HyperLiquid: The JellyJelly Conflict

Do you know about this? I'll explain the incident that happened this week:

A whale, reportedly connected to Binance, opened a 6 million USDT short on a low-cap token called JellyJelly.

Then, they pumped the price themselves, causing their own position to be force-liquidated.

This left HyperLiquid stuck with a “toxic” short, losing over 10 million USDT and facing the risk of collapse.

Another twist in the story is that Binance later listed JellyJelly. Was this a coordinated attack to crush a rising DeFi star? Unlike previous instances when centralized exchanges helped platforms recover from hacks, this time their response was silence.

HyperLiquid responded by delisting JellyJelly and closing all positions, trying to end the crisis, but the damage was done.

I have one question for all of you, by the way. I know the answer, but I would like to see if you also understand this. So, the question is: If the whale got liquidated and lost the trade, then HyperLiquid lost more than 10 million on this trade—shouldn’t the protocol profit from the forced liquidation?

Please write in comments.