Ethereum News Today: Ex-BitForex CEO's BTC Whale Exposes DeFi's Regulatory Gaps

A blockchain investigation has linked the Hyperliquid whale controlling over 100,000 BTC to Garrett Jin, the former CEO of BitForex, a now-defunct exchange embroiled in a fraud scandal. Onchain researcher Eye identified the whale's primary wallet, ereignis.eth, as connected to garrettjin.eth, which directly links to Jin's verified X (Twitter) account. The wallet's activity aligns with Jin's historical business dealings, including transfers to staking contracts and addresses tied to exchanges like Huobi (HTX). Funds traced to BitForex-related addresses and Binance deposits further solidify the connection Cointelegraph: Investigation Links 100K BTC Hyperliquid Whale to Former BitForex CEO^[1].

Jin led BitForex from 2017 to 2020, during which the exchange was accused of falsifying trading volumes and operating without Japanese regulatory approval. In 2024, BitForex lost $57 million from its hot wallets, froze withdrawals, and shut down after its team was detained in China. Hong Kong's Securities and Futures Commission (SFC) later issued fraud warnings, with users reporting unrecovered funds. Post-2024, Jin founded ventures like XHash.com, an Ethereum staking platform investigators suspect may have been used to onboard illicit funds Cointelegraph: Investigation Links 100K BTC Hyperliquid Whale to Former BitForex CEO^[1].

Skepticism persists among analysts. Quinten François questioned the simplicity of the evidence, noting that an ENS name linking to a social media account and market manipulation wallets "sounds way too simple to be true." The setup could appear intentional, raising doubts about the investigation's conclusiveness Cointelegraph: Investigation Links 100K BTC Hyperliquid Whale to Former BitForex CEO^[1].

BitForex's collapse highlights broader regulatory concerns. Hong Kong's SFC added the exchange to its Alert List of "suspicious virtual asset trading platforms" in 2024, citing its unlicensed operations and $57 million hot wallet outflows. Japan's Financial Services Agency had previously flagged BitForex for operating without registration. The SFC urged investors to exercise caution, emphasizing the risks of unregulated platforms .

Separately, onchain investigator ZachXBT clarified that the Hyperliquid whale is not linked to North Korea's Lazarus Group, despite earlier speculation. The whale is instead described as a cybercriminal using stolen funds for high-leverage trading. This distinction shifts focus from geopolitical risks to the broader implications of illicit capital in decentralized finance (DeFi) .

The case underscores vulnerabilities in crypto markets, particularly the interplay between transparency and manipulation. Hyperliquid's role as a venue for large-scale leveraged trades has drawn scrutiny, with critics highlighting the platform's potential to amplify volatility. The SFC's warnings and ongoing investigations reflect heightened regulatory vigilance in regions like Hong Kong, where crypto markets are rapidly evolving Cointelegraph: Investigation Links 100K BTC Hyperliquid Whale to Former BitForex CEO^[1].