Wintermute CEO Firmly Denies Lawsuit Plans Against Binance Following October Market Crash
Evgeny Gaevoy, the CEO of Wintermute, has firmly denied allegations that his crypto market-making company intended to sue Binance over the
Quick overview
- Evgeny Gaevoy, CEO of Wintermute, denied rumors of a lawsuit against Binance following a significant market crash that resulted in over $20 billion in losses.
- Gaevoy criticized the spread of 'baseless rumors' on social media and emphasized that Wintermute has no plans to sue Binance.
- Despite speculation about Wintermute's financial dealings with Binance, Gaevoy reassured that the company's risk management procedures were effective during the market turmoil.
- Binance has initiated a compensation program for affected traders, while Gaevoy maintains that Wintermute's relationship with Binance remains strong.
Evgeny Gaevoy, the CEO of Wintermute, has firmly denied allegations that his crypto market-making company intended to sue Binance over the terrible market meltdown on October 10 that wiped out more than $20 billion in leveraged positions throughout the cryptocurrency market.
Dispelling the FUD: No Lawsuit Against Binance
Gaevoy said on X Monday, directly addressing rumors that had propagated on social media, “We never planned to sue Binance, and we don’t see any reason to do so in the future.” The CEO was upset with people who were circulating what he called “baseless rumors,” but he decided not to name names because “most of the people who believe these have goldfish memory.”
The allegations started after one of the biggest liquidation events in crypto history, when Bitcoin dropped 15.2% from $121,560 to less than $103,000 on October 10, the day after U.S. President Donald Trump announced tariffs. The unexpected drop set off a chain reaction of liquidations that harmed traders, market makers, and centralized exchanges. This was mostly because there was record-high open interest in crypto markets before the retreat.
Market Stability and Liquidity Provider Dynamics
A WhalePump Reborn user on X, who has about 13,000 followers, said that Wintermute had been hurt by problems with Binance’s auto-deleveraging (ADL) risk mechanism during the crash and was asking for money back. The account said that “Binance completely disagrees with the amounts Wintermute is asking for,” and it also said that other crypto trading platforms were getting ready to file lawsuits. Gaevoy said these assertions were “complete bullshit” without any hesitation.
Changpeng Zhao, the former CEO of Binance, spoke out about the issue and told his 10.4 million X followers to “always verify with official sources” before believing such reports. A lot of crypto influencers had disseminated the rumors, making people in the community scared, unsure, and doubtful.
Even while Wintermute denied it, the company came under suspicion after sending more than $700 million to a Binance hot wallet only hours before the market fell in October. This led some to think that the company had something to do with the disaster. Later, though, Gaevoy told The Block’s “Big Brain” podcast that Wintermute withdrew “roughly the same amount” and stressed that the company was “perfectly fine” after the incident.
Wintermute is one of Binance’s biggest liquidity providers. It helps keep prices stable and makes the market more efficient on the platform. Gaevoy says the two companies have worked together well for years, so their relationship seems to be fine.
Binance’s Compensation and Crisis Response
After the meltdown, Binance did a lot to help traders who lost money. For example, they paid out $283 million to select traders after the synthetic assets USDe, BNSOL, and WBETH lost their value on the platform. The exchange has started a $400 million program to help users who were harmed, with $100 million set aside as low-interest loans to help institutional clients get back to trading. It’s not apparent if Wintermute got any money for his work.
Gaevoy said on the “Big Brain” podcast that some of Wintermute’s liquidated holdings happened at “very strange” and “completely ridiculous prices.” However, he said that the firm’s risk management procedures worked well throughout the tumultuous time.
It seems that Gaevoy’s public denial helped alleviate the market’s concerns. On Monday, the crypto market dropped 3% to $3.65 trillion, and about $1.3 billion in leveraged positions were closed within 24 hours. This drop may have been caused by speculations that were going around.Try again
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