Bitget CEO criticizes Hyperliquid's handling of JELLY incident as centralization concerns rise
Bitget CEO slams Hyperliquid for JELLY delisting
Gracy Chen, CEO of crypto exchange Bitget, has sharply criticized blockchain network Hyperliquid for its handling of a recent trading incident involving the JELLY token, warning the network may be on track to become “FTX 2.0.”
Her comments come after Hyperliquid delisted perpetual futures tied to JELLY on March 26 and promised to reimburse users affected by what it called “suspicious market activity.”
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The JELLY perp contracts were forcefully closed following a deliberate manipulation: a trader opened a $6 million short position and then artificially inflated JELLY’s price on-chain, causing self-liquidation. The incident drew scrutiny not just for the activity itself, but also for Hyperliquid’s swift intervention—reached by consensus among only eight validators—raising concerns about centralized control.
Industry concerns over governance and transparency
Chen called the decision to force-settle open positions “immature” and “unethical,” arguing it sets a dangerous precedent for how decentralized exchanges respond to volatility. “Trust—not capital—is the foundation of any exchange,” she said. “And once lost, it’s almost impossible to recover.”
While Hyperliquid bills itself as a decentralized alternative to centralized trading platforms, critics have highlighted its limited validator count—only eight, compared to Ethereum’s nearly one million—suggesting vulnerability to insider influence. BitMEX co-founder Arthur Hayes added that traders are unlikely to care, but noted the contradiction in Hyperliquid’s decentralization claims.
Broader implications for DeFi platforms
The JELLY incident follows a March 12 Ether liquidation that cost Hyperliquid’s liquidity pool $4 million, leading the platform to increase margin requirements. As the dominant player in the perpetuals trading market with 70% share, Hyperliquid’s risk management decisions carry significant weight in the DeFi space.
The backlash highlights the delicate balance between user protection and decentralization, a tension that could shape future regulatory and design decisions in crypto trading platforms.
