Wintermute Denies Binance Lawsuit After $19B October Flash Crash
Evgeny Gaevoy, founder of Wintermute, has dismissed all speculation of a Binance lawsuit over the October 10–11 flash crash, calling the rumours “baseless”. Changpeng Zhao echoed this denial by quote-tweeting Gaevoy. Wintermute, Binance’s largest market maker, never intended litigation and remains fully operational.
During the crash, Binance activated its auto-deleveraging (ADL) mechanism, spent $188 million from its insurance fund and issued $283 million in refunds, excluding ADL losses. On-chain data shows Wintermute’s portfolio fell 12 % from $637 million to $572 million after a 1,000 BTC inflow days earlier. While on-chain liquidations reached $19 billion and briefly wiped $600 billion off crypto market cap, analysts estimate actual trader losses were closer to 5 %–15 %. Bitcoin futures open interest plunged over 30 % before BTC rebounded to around $114,000. The firm’s refutation of any Binance lawsuit removes a key legal overhang but highlights ongoing structural risks in derivatives and potential rate-cut expectations.
Neutral
The denial of any Binance lawsuit removes a major legal overhang that had clouded market sentiment, which is positive for price stability in the short term. However, the incident underscores persistent structural risks in derivatives—highlighted by large ADL events and significant futures liquidations—and leaves uncertainty around regulatory and monetary policy drivers. As a result, traders can expect muted volatility in the near term as the market digests both the reduced legal risk and the broader implications for leverage and risk management.