Evgeny Gaevoy, founder and CEO of crypto market-making firm Wintermute, has rejected a series of rumors that the company is planning to file a lawsuit against Binance after the crypto liquidation event that caused the markets to drop on October 10. When confronted with the question of a possible lawsuit after a recent rumor, Gaevoy said on X: “We never had any plans to sue Binance, we don’t see any reason to do it in the future, and literally nothing changed since this tweet.”
Wintermute denied the allegations, followed a bunch of tweets and posts on social media in which it was claimed that the firm had been deeply impacted by the crash and that it wanted Binance to compensate it. The market maker had already acknowledged that it was hit by the event but that it was still able to function normally, with Gaevoy saying on October 11 that Wintermute “survived the largest liquidation event in crypto history.”
The crash on October 10 resulted in the liquidation of more than $20 billion worth of leveraged crypto positions, and thus, the fear of a liquidity crisis that would become a doom loop of the market, like in 2022, has spread. Traders, market makers, and centralized exchanges were the primary victims of the sell-off, according to industry experts in conversation with The Chainbull. The latter was triggered by the record high open interest before the sharp pullback.
An account called WhalePump Reborn, which has about 13,000 followers, posted on social media that Wintermute was hit by Binance’s auto-deleveraging (ADL) mechanism and thus should be compensated. In the same post, it was stated that Binance was not in favor of Wintermute’s request for reimbursement. Gaevoy, interacting with the thread, said the statement was “complete bullshit” and that it was “not even remotely true” that they were contemplating filing a legal suit.”
In the wake of the market chaos, Binance, the largest crypto exchange by trading volume, is said to have paid users $283 million after assets like USDe, BNSOL, and WBETH had a sharp depeg. Additionally, the exchange initiated a $400 million recovery plan, which comprises $100 million of low-interest institutional loans.
Gaevoy, however, admitted on the podcast that some of Wintermute’s positions were liquidated at “very strange” prices, but the company was still financially viable. The on-chain data shows that Wintermute had sent $700 million to Binance just a few hours before the crash and then withdrew almost the same amount, thus emphasizing that the firm was still in good standing despite the market turmoil.
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