Allegations Link Former BitForex CEO Garrett Jin to $80 Million Crypto Shorting Profit Amid Black Swan Event

Executive Summary

On-chain data indicates Garrett Jin, former CEO of BitForex and operational director at Huobi, allegedly secured over $80 million from precisely timed short positions during a recent crypto market "black swan" event, intensifying scrutiny on market manipulation and insider activity.

The Event in Detail

On-chain investigations, notably by crypto researcher Eye, have linked a substantial whale entity on Hyperliquid to Garrett Jin. This entity, identified through the ENS name "ereignis.eth" (connected to "garrettjin.eth"), is alleged to have made over $80 million in profit within 24 hours by opening more than $1.1 billion in Bitcoin (BTC) and Ethereum (ETH) short positions just before a significant market downturn on October 11. This event triggered the largest single-day liquidation in crypto history, amounting to $19.13 billion globally, with BTC briefly falling below $102,000 to $101,516 and ETH dropping to $3,400.

Key on-chain activities attributed to Jin include the rotation of over 35,000 BTC into ETH since August through Hyperliquid's spot and perpetual contracts, followed by staking large amounts of ETH. The whale's wallet also facilitated a $735 million BTC short, with funds tracing back to BitForex-related addresses and Binance deposits. Following the publication of these allegations, Jin reportedly altered his social media privacy settings and removed mentions of XHash.com from his profiles, actions interpreted by investigators as an attempt to conceal information.

Jin's professional history includes serving as CEO of BitForex from 2017 to 2020. BitForex subsequently faced accusations of falsifying trading volumes, was flagged by Japan's Financial Services Agency, and ultimately shut down in 2024 after a $57 million hack, frozen withdrawals, and the detention of its team in China. The Hong Kong SFC also issued a warning for suspected fraud. Post-BitForex, Jin founded ventures such as WaveLabs VC (2020), TanglePay (2021), IotaBee (2022), and GroupFi (2023), most of which are now inactive. In 2024, he launched XHash.com, an institutional Ethereum staking platform, which investigators allege may have been used to onboard questionable funds.

Market Implications

These allegations carry significant implications for the broader Web3 ecosystem and investor sentiment. The alleged manipulation by a figure with a history of involvement with a defunct exchange accused of fraud underscores the persistent risks within the crypto market. It is likely to lead to increased scrutiny on large "whale" movements and trading activities, particularly around volatile market events. The incident intensifies concerns about potential insider trading and the integrity of centralized platforms, prompting calls for more robust regulatory frameworks and enforcement to prevent similar occurrences.

The market's high volatility following such events can erode investor trust, particularly when linked to individuals previously associated with fraudulent activities. This situation reinforces the ongoing debate about the need for greater transparency and accountability from influential entities in the cryptocurrency space. The community and regulators may demand more verifiable "Proof of Reserves" audits and clearer operational disclosures from exchanges and decentralized finance (DeFi) protocols to mitigate such risks.

Expert Commentary

Changpeng Zhao (CZ), founder of Binance, commented on the unfolding situation, requesting cross-verification of the claims made against Jin. This highlights the industry's recognition of the seriousness of such allegations and the need for thorough investigation. On-chain analysts, like Eye, emphasize the critical role of on-chain sleuthing in uncovering potential market abuses and connecting seemingly disparate activities to specific individuals.

Broader Context

The alleged actions of Garrett Jin resonate with past incidents that have shaken investor confidence in the crypto market. The collapse of FTX in 2022, characterized by opaque dealings and significant financial losses, serves as a stark reminder of the consequences of unchecked centralization and hidden financial maneuverings. Such events consistently lead to market instability and a re-evaluation of industry integrity, reinforcing the paradox between crypto's decentralized ideals and the opaque realities of some major players.

The recurrent nature of these controversies, from the Mt. Gox hack to concerns surrounding stablecoin reserves, demonstrates that a lack of transparency often breeds fear and triggers sell-offs. For the crypto industry to mature and attract mainstream and institutional capital, addressing this shadow economy and establishing verifiable transparency, strong governance, and genuine decentralization are critical prerequisites.