Bitget CEO Blasts Hyperliquid’s Handling of Exploit: “May Be On Track to Become FTX 2.0”

• Gracy Chen criticized Hyperliquid for “immature, unethical, unprofessional” handling of the $JELLY exploit, alleging trust was compromised and its actions set a dangerous precedent
• Chen claimed Hyperliquid’s lack of KYC/AML protocols, mixed vaults, and unrestricted position sizes facilitate systemic risks and manipulation, warning of potential further altcoin attacks
• The crypto community mostly disagreed with Chen’s comments, defending Hyperliquid’s actions as responsible measures and calling the criticisms distasteful given Bitget is a direct competitor

The drama surrounding Hyperliquid’s recent exploit continues to escalate as Bitget CEO Gracy Chen weighs in with sharp criticism. The alleged $JELLY token manipulation, which triggered millions in losses, has become a flashpoint for questions about Hyperliquid’s operations and reliability.

In a strongly worded Twitter post, Chen described Hyperliquid’s handling of the situation as “immature, unethical, and unprofessional,” alleging that it compounded user losses and dealt a blow to the platform’s integrity. Her harsh critique also extended to Hyperliquid’s decision to force-settle $JELLY positions at favorable prices, which she claimed sets a “dangerous precedent” for decentralized exchanges.

Chen also further raised concerns about Hyperliquid’s operational structure, comparing it to an offshore centralized exchange (CEX) due to its alleged lack of KYC/AML protocols, which she argued facilitate illicit activity. Moreover, she pointed to flaws in Hyperliquid’s product design—such as mixed vaults that may expose users to systemic risks and unrestricted position sizes that can enable market manipulation.

The Bitget CEO warned that these vulnerabilities, if left unaddressed, could make Hyperliquid susceptible to further attacks, potentially putting it on track to become, as she put it, “the next catastrophic failure in crypto.”

During the rant, Gracy Chen went as far as to compare Hyperliquid to the infamous bankrupt exchange FTX: “Hyperliquid may be on track to become FTX 2.0”, she said.

Harsh Post Didn’t Land Well With the Community

Albeit some of Chen’s criticisms deserve some merit, the majority of the cryptocurrency community replying to her post appeared to disagree, or remark the comments distasteful, since she was talking about a direct competitor.

One user remarked, “If protecting thousands of people from a bad actor is unethical, you have your priorities in the wrong place.” Others argued that Bitget, in a similar scenario, would likely have delisted the token too. 

Critics also suggested that Hyperliquid’s actions demonstrated responsible decision-making during a volatile situation. Certainly, the backlash highlighted a divide in how the community perceives exchange responsibilities, with some prioritizing proactive measures over claims of centralization risks.

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