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Crypto Journalist
Anas Hassan
Crypto Journalist
Anas Hassan
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Wintermute founder Evgeny Gaevoy has dismissed widespread speculation that his firm intends to sue Binance for losses from the historic October crypto crash, saying “literally nothing has changed“, since his earlier clarifications and the company never had such plans.
The clarification comes after days of social media speculation linking the market maker to potential litigation over auto-deleveraging executions during the October 10-11 flash crash that liquidated $19 billion in positions and briefly wiped $600 billion from the crypto market capitalization.
Gaevoy labeled the rumors as “larp“When I asked him directly if he had signed a non-disclosure agreement with Binance or coordinated with other market makers to pursue joint legal action.
Former Binance CEO Changpeng Zhao amplified the quote-tweeting denial of Gaevoy’s post, writing, “If someone made you believe otherwise, it’s time to click unfollow.“
October Crash Stirs ADL Controversy
The October 10 sale was activated by President Donald Trump’s announcement of 100% tariffs on Chinese importscreating panic in world markets.
Bitcoin fell to $104,782 during the 48-hour period, while Ethereum and the main altcoins lost between 15% and 20% of their value.
Binance’s trading infrastructure went under the strain, with API failures returning HTTP 503 errors and Reduce-Only orders being rejected during peak volatility.
The exchange’s Auto-Deleveraging mechanism was activated, resulting in short liquidations at prices up to five times prevailing market rates.
Binance spent $188 million from its insurance fund and issued $283 million in refunds for oracle depegsalthough ADL losses were excluded from compensation.
Gaevoy had previously stated in a video that Wintermute was “ADL at completely ridiculous prices“And he said the company was considering legal options. Those remarks fueled speculation about the lawsuit.
Chain analysis of Wintermute’s 10 tracked wallets in Ethereum, Arbitrum and Solana revealed a 12% decrease in the portfolio, falling from $637 million to $572 million.
No large withdrawals exceeding $10 million or settlement patterns involving Aave or Compound were detected; however, a single entry of 1,000 BTC worth about $61 million occurred on October 4, just days before the crash.
Market structure under scrutiny
The October event exposed structural vulnerabilities in crypto derivatives markets, where notional liquidation figures greatly overestimate actual capital losses.
Speaking with Cryptonews, Sam Seo, President of the Kaia DLT Foundation, he said the actual capital lost by traders is likely”in the range of 5% to 15% of the title number,” translating between $950 million and $2.85 billion in actual losses.
He warned that “the remaining 85-95% was simply phantom leverage, synthetic exposure that was quickly turned around.“
Bitcoin futures open interest collapsed by more than 30% during the sale, wiping out more than $10 billion in notional positions in one of the largest one-day declines on record, comparable to the May 2021 liquidation and the FTX unwind in 2022.
Patrick Heusser, Head of Lending and TradFi at Sentora, also explained that “liquidations [are] a speedometer for the intensity of deleveraging, not a profit and loss statement,“, noting that exchanges resolve these events with margin and insurance funds.
Despite the chaos, Bitcoin recovered to $114,000 by October 13, supported by $420 million in spot ETF flows that helped stabilize prices.
“Uptober” turns red for the first time since 2018
According to ReutersOctober marked Bitcoin’s first monthly loss since 2018, snapping a seven-year winning streak and ending nearly 5% lower for the month, despite reaching an all-time high above $126,000 just days before the crash.
The reversal came as broader risk appetite weakened, with Federal Reserve Chairman Jerome Powell pushing back on market expectations for continued rate cuts and a government shutdown blocking crucial economic data.
Analyst Scott Melker has it first called the resistance of Bitcoin “a small miracle” after liquidationsaying “I don’t think we are entering a bear market“and noticing”this is not 2017. Nor is it 2021. What happened last week was purely structural.“
Bitcoin opened November trading at $106,961down 0.7% as whale profiteering and continued ETF flows pressured prices below $107,000.
For the first time in seven months, institutional demand fell below the pace of new currency issuance, indicating that large buyers are backing off.
Markets are now pricing in a roughly 70% chance of a 25 basis point Fed rate hike in December, down from 94% a week earlier, as policymakers provide mixed signals on growth and inflation.
Analysts remain cautiously optimistic that November could restore typical seasonal strength, as Bitcoin has historically averaged returns exceeding 40% during the month.
Speaking with Cryptonews, MEXC Research Chief Analyst Shawn Young noted that “accumulation of currencies by the main market participants, the trade agreement between Washington and Beijing, and a moderately positive performance of the stock market are paving the way for a possible recovery in November.“
VALR CEO Farzam Ehsani also warned that the market structure remains fragile, saying: “any change in the tone of the Fed or a new round of geopolitical tension could drastically change the balance of power,” Keep Bitcoin likely bound between $107,000 and $113,000 as participants await clearer macro signals.
