Crypto Whale Opens $163M Bitcoin Short Position Amid Insider Trading Concerns

Executive Summary

A significant crypto trader, identified by the address "0xb317" on the decentralized derivatives exchange Hyperliquid, has initiated a new $163 million 10x leveraged short position on Bitcoin (BTC). This action follows a prior incident where the same entity amassed $192 million in profits by shorting the market just prior to a major announcement regarding U.S. tariffs on Chinese imports by former President Donald Trump. The timing of both trades has intensified concerns about potential insider knowledge and market manipulation within the cryptocurrency ecosystem, prompting calls for investigation from legal experts.

The Event in Detail

The trader, known as "0xb317" and allegedly linked to former BitForex CEO Garrett Jin, executed a $163 million leveraged perpetual contract to short Bitcoin. The position was entered when Bitcoin was trading at approximately $117,369.7, with a liquidation price set at $123,520. Since its inception, the trade has generated an unrealized profit exceeding $3 million.

This current maneuver mirrors a previous, highly successful trade by the same entity. In October 2025, the trader opened a substantial short position merely 30 minutes before then-President Trump's declaration of 100% tariffs on Chinese tech imports. This announcement precipitated a massive market sell-off, wiping out an estimated $19 billion to $20 billion in crypto market value within hours and resulting in what some analysts termed the "largest liquidation event in crypto's history." During this period, Bitcoin experienced a precipitous drop from highs of over $125,000 to below $102,000, representing an 18% decline, while Ethereum plunged by approximately 12%. The timely closure of that short position yielded $192 million in profits for the trader, leading the crypto community to label the entity an "insider whale."

Market Implications

The repeated, strategically timed large-scale short positions by the "insider whale" have introduced significant volatility and uncertainty into the cryptocurrency market. The current $163 million short is perceived as an amplification of bearish sentiment, particularly given the previous trade's lucrative outcome linked to geopolitical news.

This activity raises critical questions about market fairness and the potential for insider trading within the largely unregulated decentralized finance (DeFi) space. The market's susceptibility to such large individual trades underscores its structural fragilities, including over-reliance on leverage and the operational dynamics of certain exchanges.

On Hyperliquid, the platform where these trades occurred, the Auto-Deleveraging (ADL) mechanism has faced criticism. During the October 2025 crash, Hyperliquid recorded the highest market-wide liquidation amount at $10.31 billion, far exceeding competitors. The ADL system, designed to protect the exchange by automatically closing profitable positions when insurance funds are insufficient, was accused by many market observers of exacerbating the sell-off. Over 1,000 wallets were completely liquidated on Hyperliquid, and an additional 6,300 wallets suffered losses totaling over $1.23 billion, as this mechanism prematurely liquidated hedge positions and contributed to market imbalances.

Expert Commentary

Following the initial $192 million profit, pro-crypto attorney John E. Deaton publicly called for a formal investigation, stating, "If true, this needs to be investigated." This sentiment is echoed by Janis Kluge, a researcher at SWP Berlin, who observed that the events highlight the consequences of unregulated markets, stating, "Crypto people are realising today what it means to have unregulated markets — insider trading, corruption, crime, and zero accountability." These comments reflect growing concerns among market participants and observers regarding the integrity and transparency of decentralized trading platforms.

Broader Context

The October 2025 market crash was a direct consequence of escalating U.S.-China trade war fears, particularly the threat of 100% tariffs on Chinese imports. This macroeconomic event exposed the crypto market's heightened sensitivity to global political and economic shifts. The market lacked strong bullish catalysts, with factors such as ETF outflows and a stronger U.S. dollar contributing to investor caution. The crash was characterized by massive liquidations, panic selling by retail traders, and a reinforcement of the view that the crypto market, with its high leverage and sometimes unregulated exchanges, remains vulnerable to systemic shocks.

Despite the controversy surrounding the "insider whale," Hyperliquid emphasizes its commitment to security and transparency through a decentralized architecture and a fully transparent on-chain order book. These features are intended to minimize fraud, manipulation, and front-running by recording every transaction immutably. However, the events suggest that the interplay of market design, leverage, and the actions of large participants can still lead to significant market dislocations and raise questions about equitable trading conditions. The ongoing vigilance around Bitcoin's $100,000 support level highlights the continued battleground for market stability amid these complex dynamics.