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The digital currency market has been hit by yet another wave of bearish candles, dropping 4.1% over the last 24 hours. Bitcoin, Ethereum, and Dogecoin have all experienced significant setbacks, with all major market-cap cryptocurrencies falling beneath support points that were maintained the previous week.
The decline accelerated after allegations emerged on X indicating that Wintermute, one of the sector’s largest market makers, was gearing up to file a lawsuit against Binance regarding supposed issues tied to the crash on October 10.
Speculations of a Lawsuit Against Binance Amplify Concerns
Market anxiety intensified as rumors spread on X, asserting that Wintermute, a top market maker in the industry, was getting ready to sue Binance for losses suffered during the October 10 crash. The conjecture began when a user known as WhalePump Reborn asserted that Wintermute had incurred hundreds of millions in losses and was contemplating legal action, characterizing the scenario as “not going to end well.”
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Following this, another comprehensive post from a well-known X account called StarPlatinum, which discussed the rumors that Wintermute was taking legal steps against Binance over alleged unfair ADL executions during the significant liquidation episode in early October.
As pointed out in the post, Binance’s system congestion during the crash resulted in automatic deleveraging (ADL) at extreme price levels, leading to an estimated $19 billion to $20 billion in liquidations within just 24 hours, the largest single-day loss in the history of crypto.
It is worth mentioning that Wintermute’s portfolio across Ethereum, Arbitrum, and Solana declined by approximately $65 million subsequent to the crash, although no on-chain indicators suggested forced liquidations or substantial withdrawals. Binance, for its part, had acknowledged system overloads during that period but claimed there was no preferential treatment or technical issue that could have resulted in any unfair losses.
Wintermute Founder Denies Lawsuit Allegations
As fear spread throughout the market, Wintermute’s founder, Evgeny Gaevoy, took to X to nullify the rumors completely. Citing an earlier post from October 11, Gaevoy reiterated that Wintermute had no intentions of suing Binance and saw no justification to pursue such actions in the future.
“We have never contemplated suing Binance, nor do we find any reason to do so in the future,” Gaevoy stated on X. “I should probably request to take note of everyone spreading unfounded rumors, but most of those believing these have short memories, so I won’t,” he added. He further characterized the circulating assertions as complete nonsense in direct response to the WhalePump Reborn post.
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The Wintermute allegations form part of multiple factors contributing to the decline in cryptocurrency prices. Another element could be Fed Chair Jerome Powell indicating that the central bank may not seek additional rate reductions in the near term. Compounding the selling pressure were withdrawals from spot Bitcoin ETFs. According to data from Farside Investors, Spot Bitcoin ETFs commenced November with withdrawals on Monday, extending the trend to four consecutive days of outflows.
At the moment of writing, Bitcoin is trading at $104,502, down by 2.8% over the past 24 hours. Ethereum is priced at $3,490, decreasing 6.0% in 24 hours. Dogecoin is valued at $0.1618, down 6.8% in 24 hours.
Featured image generated with Dall.E, chart from Tradingview.com
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