Ethereum News Today: Wintermute CEO Denies Accusations; Critics Say Actions Fuel Volatility

Wintermute CEO Evgeny Gaevoy has refuted recent allegations that the market maker orchestrated or exacerbated a $2.24 billion liquidation event in February 2025, attributing the turmoil to macroeconomic factors rather than market manipulation. The claims, initially raised by crypto investigator Marty Party, suggest Binance directed funds to Wintermute to trigger forced sell-offs and pressure traders into liquidating positions. Gaevoy dismissed these accusations, emphasizing that Wintermute's operations are driven by short-term trading strategies and risk management rather than coordinated manipulation.

The liquidation event followed a broader market sell-off linked to U.S. President Donald Trump's announced tariffs on China, Canada, and Mexico, which triggered cross-asset volatility. During this period, Wintermute processed $14.94 billion of Binance's $34.54 billion in monthly trading volume, reinforcing its role as a top liquidity provider. Critics argue that market makers like Wintermute can amplify downturns by offloading large holdings, as seen in August 2024 when five firms sold 130,000 ETH ($290 million) as prices dropped from $3,000 to $2,200. Wintermute accounted for 47,000 ETH of these sales.

Gaevoy clarified that Wintermute avoids prolonged positions, focusing instead on short-term trades such as buying discounted assets. He highlighted the firm's diversified operations across centralized exchanges, decentralized finance (DeFi), and over-the-counter (OTC) markets, stating, "Our core business relies on trust, and we don't manipulate prices." This stance contrasts with past incidents involving firms like Alameda Research, which collapsed due to unsustainable positions.

Market data shows mixed outcomes post-liquidation. The global crypto market cap rebounded 3.20% to $3.21 trillion, with Bitcoin and Ethereum gaining 3.58% and 3.96%, respectively. However, regulators are intensifying scrutiny of liquidity providers, particularly after high-profile exchange failures. Transparency in trading practices has become a focal point for both institutional and retail participants.

While Gaevoy rejected conspiracy theories, the debate underscores how large-scale trades influence market perceptions during fragile phases. Analysts note that market makers' actions during downturns can shape short-term price trends, even if unintended. For instance, Wintermute's recent exit from Bitcoin positions before a $90,000 price drop raised questions about potential insider knowledge or strategic selling patterns.

The firm's portfolio includes substantial holdings in Solana (SOL) and stablecoins, with $127.96 million in USDC and $41.54 million in FDUSD. This liquidity buffer allows Wintermute to re-enter markets at lower price levels, a strategy critics argue could exacerbate volatility. Despite these concerns, Gaevoy reiterated that Wintermute's operations are guided by compliance standards and diversified risk management.