A recent event involving the JELLY token has sparked criticism towards the decentralized exchange Hyperliquid. Analysts claim the situation mirrors the crisis that occurred with FTX.
What Happened with JELLY?
The incident began when a trader opened a $6 million short position against the JellyJelly (JELLY) token, which had a small market cap of around $20 million. The trader then manipulated the market by inflating JELLY’s price on-chain, causing the liquidation of his own short position and resulting in a loss for Hyperliquid of over $12 million. This forced the exchange to delist JELLY abruptly.
Gracy Chen's Response
Gracy Chen, CEO of Bitget, sharply criticized Hyperliquid, describing its actions as 'immature, unethical, and unprofessional'. She emphasized that the platform operates like a CEX without proper KYC/AML procedures, enabling questionable transactions.
Implications for Hyperliquid
The incident has raised numerous questions about transparency and risk management at Hyperliquid. The company claims that delisting JELLY was necessary due to extreme manipulation, but its actions have left traders questioning the platform’s fairness.
While Hyperliquid attempts to justify itself, the JELLY incident raises sharp questions about governance and transparency in the cryptocurrency world. It is noteworthy that such incidents may recur if the issues are not addressed.
