Wintermute dismisses Binance lawsuit rumors

Evgeny Gaevoy, chief executive officer and founder of crypto market maker and trading firm Wintermute, has denied allegations that his firm is preparing a lawsuit against Binance following the massive October market crash.

Speaking on X, Gaevoy wrote: “literally nothing changed since this tweet and we never had plans to sue Binance, nor see any reason to do it in the future.” His post directly addressed social media speculation that Wintermute had suffered heavy losses and was preparing legal action against Binance.

The rumors began circulating shortly after the October 10th market crash, which wiped out more than $20 billion in leveraged positions across crypto exchanges. The sudden sell-off led to widespread liquidations, sparking fears that some major market makers or trading firms were at risk of collapse.

In a follow-up thread, Gaevoy wrote that Wintermute had no issue with Binance, noting that the firms had worked together for years and saw no reason to escalate anything legally.

Wintermute clears the air after October crash

Many crypto-watchers have described the October 10th crash as one of the largest liquidation events recorded in recent cryptocurrency history. According to analysts, more than $20 billion in open interest was wiped out in a matter of a few hours as a result of a liquidation spiral following the forced closure of countless leveraged positions on every major exchange. 

Experts claimed that the crash was the result of high levels of leverage combined with a sudden drop in liquidity, which created perfect storm conditions for even minor price canes to turn disastrous for traders. Individual traders, professional market makers, and centralized exchanges all suffered from ramped-up losses. 

A few days after the incident, Binance revealed that it had already paid $283 million in compensation to some affected traders after synthetic assets USDe, BNSOL, and WBETH went off-peg. In addition, the exchange also launched a $400 million rescue fund, including $100 million allocated as low-interest capital to aid institutional clients re-enter trading. 

Although Binance confirmed compensation for its market players, it is uncertain if Wintermute was among the reimbursed. In a Big Brain episode of The Block’s podcast, shared late October, Gaevoy admitted that some of Wintermute’s liquidation strikes were “very weird” and occurred at “completely ridiculous prices.” Nonetheless, he objected to stakeholders’ concerns that the firm’s overall financial security was undermined. 

He clarified that Wintermute had been fine, adding that the firm’s systems had worked precisely and managed risk effectively despite the intense volatility. According to other sources, Wintermute, one of Binance’s largest liquidity providers, sent more than $700 million worth of cryptos to the exchange a few hours before the crash. 

Gaevoy confirmed on “Big Brain” that the company withdrew “roughly the same amount.”

Wintermute’s response calms market nerves

Moreover, the obvious unwillingness of Wintermute to wage a legal battle regarding the spread of rumors about the lawsuit has a calming effect on the public.

In the aftermath of October’s high volatility, when switching from Binance or one of its subsidiaries would have raised too many questions, a legal struggle between one of the market’s leading market makers and the world’s largest exchange could have exacerbated market anxiety, provoking possible liquidity crises in all exchanges. 

In contrast, Gaevoy’s assertion suggests that during those difficult times, Wintermute was able to maintain stability without attacking other projects behind the scenes. Market observers claim this is also a form of publicity worth considering. 

For Binance itself, the absence of threats of legal action means an alleviation of its position, as the exchange also continues to face pressure in various jurisdictions. Binance has been subject to a series of enforcement actions over the past several months, but it remains the leader in terms of market share.

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