The decentralized exchange Hyperliquid is facing scrutiny following its handling of the JELLY token market, raising concerns from industry leaders. Bitget CEO Gracy Chen compared Hyperliquid to the now-defunct exchange FTX after Hyperliquid’s response to unusual activity involving the JELLY token resulted in an estimated $10.6 million loss. The delisting of the token and forced settlement of open positions drew sharp reactions from the crypto community.
Bitget CEO Warns Hyperliquid May Mirror FTX Collapse
In a recent post on X, Bitget CEO Gracy Chen warned that Hyperliquid could follow a similar trajectory to FTX. Chen raised alarms over the platform’s decision to halt the trading of the JELLY token and forcefully settle open trades. According to her, this action created unfair outcomes, favoring some traders while causing losses to others.
Bitget CEO labeled Hyperliquid’s actions as immature and unethical. The forced closure followed a 230% spike in JELLY price within one hour. A $5 million short position was liquidated during this time, raising concerns about market manipulation. The situation placed Hyperliquid’s treasury at further risk, with potential exposure reportedly nearing $240 million.
Gracy Chen added,
“Unless these issues are addressed, more altcoins may be weaponized against Hyperliquid—putting it at risk of becoming the next catastrophic failure in crypto.”
A recent report highlighted how Hyperliquid Vault is at risk of losing its entire $230 million fund due to a surge in the Solana-based memecoin JELLY JELLY. The platform inherited a short position amid a short squeeze and now faces mounting pressure as the token’s price continues to climb.
Concerns Over Compliance and Risk Structure
Bitget CEO continued to criticize Hyperliquid’s lack of standard compliance practices. She pointed out the absence of Know-Your-Customer (KYC) and Anti-Money Laundering (AML) measures. Chen stated that Hyperliquid, although presenting itself as a decentralized platform, operated similarly to an offshore centralized exchange.
She added that this regulatory gap may allow illicit funds to move through the platform undetected. These concerns were echoed by others in the industry, including former BitMEX CEO Arthur Hayes. Chen also warned that if left unchecked, the model could lead to the same vulnerabilities that contributed to the collapse of FTX.
Mixed Vaults and Position Sizes Raise Risk
The Bitget CEO highlighted structural concerns with the platform’s product design. She noted that the use of mixed vaults exposed users to shared risks. According to Chen, this could allow the actions of a few traders to affect all users on the platform.
The JELLY token’s sharp price rise triggered emergency action from the exchange’s validator set. The platform cited suspicious market activity as the reason for delisting the token. However, the decision to settle trades at a specific price led to a backlash from affected traders.
Bitget CEO described the settlement approach as a dangerous precedent. She stressed that trust, not just capital, is essential for the success of any exchange. Without addressing these vulnerabilities, Chen warned that Hyperliquid could face further threats from manipulated markets.
Meanwhile, FTX bankruptcy case expenses reached nearly $1 billion, with legal and advisory firms receiving substantial payouts. Court records show that Sullivan & Cromwell LLP alone has earned over $248 million for handling the proceedings.
Over 50% of all cryptocurrencies ever launched since 2021 are now defunct. An even more alarming trend is emerging in 2025, where the percentage of failed tokens launched this year has reached the same level in just the first five months.
That percentage will naturally rise with more than half of the year left. Representatives from Binance and Dune Analytics told BeInCrypto that these failures are just another reminder of the need to launch viable projects, backed by solid tokenomics and a robust community.
Ghost Tokens Skyrocket
A recent CoinGecko report revealed some jaw-dropping data. Of the approximately 7 million cryptocurrencies listed on GeckoTerminal since 2021, 3.7 million have subsequently died.
Several factors are considered when evaluating whether a coin has reached its end.
“A coin is classified as ‘dead’ when it loses all utility, liquidity, and community engagement. Key indicators include near-zero trading volume, abandoned development (no GitHub commits for 6+ months), and a price drop of 99%+ from its all-time high. Teams often vanish without warning—social media accounts go dormant, domains expire,” Alsie Liu, Content Manager at Dune Analytics, told BeInCrypto.
Half of all tokens launched since 2021 have died. Source: CoinGecko.
A significant 53% of listed cryptocurrencies have failed, with most collapses concentrated in 2024 and 2025. Notably, the over 1.82 million tokens already stopped trading in 2025 significantly outpaced the approximately 1.38 million failures recorded throughout 2024.
With seven months out of the year ahead, this trend of increasing failures in the current year will continue to grow.
CoinGecko specifically suggested a potential link between economic concerns like tariffs and recession fears, noting a surge in meme coin launches after a certain election, with subsequent market volatility likely contributing to their decline.
However, not all responsibility can be placed on a greater economic downturn. Other aspects can contribute to these project failures.
“Common factors include inability to find product market fit leading to negligible interest from users or investors, or project teams that focus too much on short-term speculation with no long-term roadmap, and sometimes abandonment by developers (rug pulls). Broader issues like fraudulent intentions, weak user traction, novelty-driven hype, financial shortfalls, poor execution, strong competition, or security failures also contribute to project failure,” a Binance spokesperson told BeInCrypto.
The rapid rise in ghost tokens also came with the exponential launch of projects en masse, particularly since the start of 2024.
Analyzing the Life-Death Ratio
Last year was novel in its own right following the proliferation of meme coins. This new narrative emerged particularly after the launch of Pump.fun, a Solana platform that allows anyone to launch a token at a minimal cost.
According to CoinGecko data, 3 million new tokens were listed on CoinGecko in 2024 alone. Half of these projects died, but the other half survived. However, the situation in 2025 appears less stable.
The difference between token launches and failures in 2025 is minimal. Source: CoinGecko.
While the number of new token launches remains high, the number of failures is nearly equivalent, with launches only marginally exceeding deaths by about a thousand.
“Ecosystems with low barriers to token creation see the highest number of ghost coins. In general, platforms that make it very easy and cheap to launch new tokens see the most abandoned coins. During this cycle, Solana’s meme coin surge (e.g., via token launchpads like Pump.fun) drove a flood of new tokens, many of which lost user traction and daily activity once initial hype faded,” Binance’s spokesperson explained.
As of March 5, the meme coin market capitalization had sharply decreased to $54 billion, marking a 56.8% drop from its peak of $125 billion on December 5, 2024. This downturn was accompanied by a significant decrease in trading activity, with volumes falling by 26.2% in the preceding month alone.
Certain token categories have been hit harder than others.
Music and Video Tokens Among the Hardest-Hit Categories
A 2024 BitKE report indicated that video and music were prominent categories with many failed cryptocurrency projects, reaching a 75% failure rate. This outsized percentage suggests that niche-focused crypto ventures often face challenges in achieving long-term viability.
“These niches face adoption and utility gaps. Music tokens struggle to compete with Spotify/YouTube, while ‘listen-to-earn’ models often lack demand. As more mainstream celebrities get into the space without knowing much about blockchain technology, tokens have become the new cash-grab business,” Liu explained.
Binance’s spokesperson noted that legal and technical hurdles, such as music licensing and the significant resources needed for video delivery, complicated the scaling of decentralized alternatives.
They further explained that many projects struggled to remain sustainable without substantial user adoption or strong network effects.
“This highlights that a good concept alone is not enough; crypto projects must also compete with entrenched Web2 platforms, navigate complex industry challenges, and deliver real-world utility to succeed. Without aligning with user behavior and market needs, even well-intentioned initiatives risk fading into ghost tokens,” Binance told BeInCrypto.
Despite the discouraging number of failed tokens, this situation offers important insights into building resilient projects that withstand unfavorable market conditions.
What Can We Learn From Catastrophic Token Collapses?
Prospective token creators can learn significant lessons from once-popular projects that ultimately failed. The negative outcomes experienced by these ventures, particularly in severe instances, can motivate the development of new projects responsibly and avoid similar pitfalls.
Binance referred to notorious ghost coin cases BitConnect and OneCoin.
“BitConnect, once a top-10 coin, collapsed in 2018 after being exposed as a Ponzi scheme promising ~1% daily returns. Investors lost nearly $2 billion. OneCoin, raising ~$4 billion, never had a real blockchain and relied on aggressive multi-level marketing before collapsing. Both cases highlight the dangers of projects built on hype, unrealistic promises, and lack of verifiable technology,” Binance’s spokesperson explained.
While concerning, the rising number of ghost coins serves as a crucial reminder that discernible warning signs often precede the downfall of these cryptocurrencies.
These cases underline the necessity of rigorous research, validating underlying principles, and maintaining a cautious perspective, especially when investment gains appear unrealistically high. Prioritizing risk management and sustainable long-term factors should outweigh short-term speculative trading.
Binance particularly highlighted the importance of “Do Your Own Research” (DYOR) when evaluating crypto projects.
“Practically, this means reviewing the whitepaper, assessing whether the project solves a real problem, verifying the team’s credibility, examining tokenomics and supply distribution, and checking community and development activity,” Binance said, adding that “In essence, DYOR is about empowerment and protection. It helps investors identify solid projects and avoid scams or ghost tokens by spotting red flags early. Given how fast crypto markets move, personal due diligence remains essential for navigating the space safely and successfully.”
Ultimately, the prevalence of ghost tokens highlights a critical truth for crypto participants: thorough research and fundamental value are paramount for identifying lasting projects.
StakeStone has teamed up with the Trump family’s crypto project, WLFI, to offer cross-chain liquidity support for the USD1 stablecoin. This collaboration bridges real-world assets (RWA) and native DeFi liquidity, allowing users to move funds seamlessly across different blockchains. The partnership also enables users to earn sustainable yields and access liquidity without locking up their assets, making it easier for everyone to manage and grow their investments in the crypto space.
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StakeStone has teamed up with the Trump family’s crypto project, WLFI, to offer cross-chain liquidity support for the USD1 stablecoin. This collaboration bridges real-world assets (RWA) and native DeFi liquidity, allowing users to move funds seamlessly across different blockchains. The partnership also enables users to earn sustainable yields and access liquidity without locking up their …
Ripple’s USD-backed stablecoin, RLUSD, has seen a sudden pause in its minting activity. According to data released by the Ripple Stablecoin Tracker, the last batch of the stablecoin was minted on April 25, followed by an unexpected silence for almost a week.
Why Ripple Pauses RLUSD Minting?
Significantly, Ripple appears to have temporarily halted RLUSD stablecoin minting, with no new coins created over the past week. As per the Stablecoin Tracker data, the crypto firm last minted the stablecoin on April 25 in three batches: two with 11,500,000 tokens each and one with 15,000,000 tokens.
Following the activity, the platform paused its RLUSD minting, with the Stablecoin Tracker remaining silent with no data. This indicates that the crypto platform has minted zero stablecoin over the past week while RLUSD surpassed $300 million.
Ripple’s recent pause in RLUSD minting isn’t unprecedented, as the company has taken regular breaks over the past two months, gradually injecting new coins into circulation. This measured approach has seen RLUSD’s market capitalization grow to $316.88 million, ranking 217th.
Since its launch, RLUSD has been exhibiting notable growth with its unique utilities. Initially, the stablecoin was designed as a “golden standard” for enterprise use, targeting businesses as its primary users. However, the platform later decided to expand its use cases. Recently, Ripple integrated the stablecoin into Ripple Payment, unveiling a new utility push.
Moreover, RLUSD’s usage has diversified, serving as collateral on DeFi platforms and centralized finance applications, and facilitating donations for nonprofit organizations. It’s also listed on major crypto exchanges such as Kraken, LMAX Digital, Bitstamp, Bullish, and Zero Hash, enabling trading and purchasing.
