By listing jelly futures, Jelly, Binance and OKX leverage volatility to exploit the 400% price pumps caused by the jelly market manipulation incident, Hyperliquid has abolished the Perps of tokens and faced a backlash over centralised concerns.
After a recent market manipulation incident regarding high-hystered liquids (hype) containing jelly jelly (jelly) tokens, derivative exchanges have decided to abolish jelly and refund affected users. Shortly afterwards, Binance listed Jelly Futures, then OKX.
This was probably a seizing opportunity movement created by the extreme price swing of tokens, and was extremely appealing for speculative trading. On March 26th, Jelly’s price rose by around $0.0095, when Expoloit opened his short position, marking an increase of around 426% to $0.0.050. Given that high volatility drives trading volume, both exchanges can make a significant profit from trading fees on Jelly Perp.
Source: X from Arkham Intelligence
However, some believe that the Binance and Okx moves are about wiping away competitors, not just potential benefits from fees. One user even called it “a pure move to fill its competitors,” comparing it to Binance’s alleged role in FTX’s collapse, adding that it “rewrites the history of what happened to FTX.”
Interestingly, blockchain investigator Zachxbt pointed out that two accounts linked to operations 0x20E8 and 0x67F were funded by Binance.
Source: @zachxbt
Meanwhile, according to Coingecko, the price of the jelly has been raised to $0.020.
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Operation Incident
According to Arkham Intelligence, the trader in question opened three accounts. Three accounts worth two long positions, $2.15 million and $191.9 million, and a third of them effectively balance long positions with a short position of $4.1 million. The total amount reached $7.17 million.
The liquid has just been misused. what happened?
Traders deposited $7.167 million in three separate high lipid accounts within five minutes. He then made leveraged transactions with illiquid coins, jelly jelly.
But he ended up losing money and…unless he’s on pic.twitter.com/unymwls5sc, he’s almost a million dollars down.
– Arkham (@arkham) March 26, 2025
Traders then actively purchased jelly in decentralized exchanges. Due to the low liquidity of Dex, their purchasing activities quickly raised the price of jelly. After the token price rose more than 400%, the short position of $4.1 million was to be settled. However, the liquidation was too big to run immediately, so it was transferred to Hyperliquidity Provider, Hyperliquid’s automated market production vault. At the same time, traders quickly withdraw funds from the other two accounts, earning unrealized profits from the rise in jelly 400% + price as a result of the Dex purchase activity. According to Arkham, the traders withdraw $6.26 million, with $900,000 still remaining in their accounts.
At this point, Hyperliquid saw what was going on, restricted the trader’s accounts and frozen his ability to withdraw funds. When the withdrawal was blocked, traders began selling jelly in the market.
This sale helped them recover some funds, but did not completely save their position as they closed the market at $0.0095, the same price as the high lipids opened the short trade. As a result, all floating PNLs in the first two accounts were wiped out.
According to Abhi, founder of Web3 Company Collective, if Hyperliquid did not close the position, Jelly would have faced full liquidation if it reached a market capitalization of $150 million.
After the incident, Hyperliquid decided to abolish Jelly Perpetuals. This decision was made by consensus among Hyperliquid’s verification devices, causing outrage from the Crypto community due to focused concerns. Arthur Haier said that high-lipid iron clearly can’t handle the situation with jelly and it’s time to stop pretending that high-lipid is a distributed platform.
$hype can’t process $jelly
Stop pretending to be high lipids
And stop pretending that traders actually fuck
Where $hype returns is boring to the extent that it causes it to start in a short order
– Arthur Hayes (@cryptohayes) March 26, 2025
Reflecting his feelings, Bitget CEO Gracy Chen commented:
“The decision to close the $jelly market and force position settlement at a favorable price sets a dangerous precedent,” Chen said. “Trust, not capital, is the basis for any exchange (…), and once lost, it is almost impossible to recover.”
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