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HomeBinanceBinance and Wintermute Exposed: The Hidden Forces Behind Crypto’s $2.24B Liquidation Crash

Binance and Wintermute Exposed: The Hidden Forces Behind Crypto’s $2.24B Liquidation Crash

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  • Wintermute faces manipulation claims after $2.24B liquidations; CEO denies collusion, cites macro-driven sell-offs.  
  • Market makers sold 130K ETH ($290M) in August 2024, amplifying price drops from $3K to $2.2K.  
  • Binance’s $34.5B monthly volume includes $14.9B from Wintermute, sparking debate on liquidity providers’ market influence.

The global cryptocurrency market capitalization rose 3.20% to $3.21 trillion, with Bitcoin (BTC) and Ethereum (ETH) gaining 3.58% and 3.96%, respectively. This rebound followed a period of extreme volatility, including $2.24 billion in leveraged position liquidations on February 3. The liquidations occurred after U.S. President Donald Trump announced tariffs on China, Canada, and Mexico, triggering cross-asset sell-offs.

Crypto investigator Marty Party accused Binance and market maker Wintermute of coordinating forced sell-offs to manipulate prices. Marty Party claimed Binance directed funds to Wintermute to pressure traders into selling assets at lower levels. Wintermute CEO Evgeny Gaevoy rejected the allegations, attributing liquidations to macroeconomic factors.

“Liquidations stemmed from traditional finance events, not market manipulation,” Gaevoy stated.

He added that Wintermute avoids prolonged positions and focuses on short-term trades, such as buying discounted assets.

Data shows Wintermute remains a top liquidity provider for Binance, processing $14.94 billion of the exchange’s $34.54 billion monthly volume. Market makers like Wintermute stabilize markets but can amplify downturns by offloading large holdings.

In August 2024, five firms sold 130,000 ETH ($290 million) as prices dropped from $3,000 to $2,200. Wintermute sold 47,000 ETH, followed by Jump Trading (36,000 ETH) and Flow Traders (3,620 ETH). These moves reflect risk management, though critics argue they exacerbate price declines.

Gaevoy emphasized Wintermute’s diversified operations across centralized exchanges, decentralized platforms, and over-the-counter markets. The firm avoids concentrated bets, he said, and adheres to compliance standards.

“We don’t manipulate prices—our core business relies on trust,” Gaevoy asserted. 

His comments contrast with past incidents involving firms like Alameda Research, which collapsed after taking unsustainable positions.

Bitcoin and Ethereum’s recent gains suggest temporary stabilization, but macroeconomic risks persist. Tariffs and geopolitical tensions remain drivers of volatility, influencing trader behavior.

ETHNews analysts note market makers’ actions during downturns can shape short-term price trends, even if unintended.

Regulators increasingly scrutinize liquidity providers like Wintermute, particularly after high-profile exchange failures. Transparency in trading practices is now a focal point for institutional and retail participants. While Gaevoy dismissed conspiracy theories, the debate underscores how large-scale trades impact perceptions during fragile market phases.

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Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: [email protected] Phone: +49 160 92211628
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