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1/ Huge respect for Dragonfly continuing to invest in the bear market.
But I'm morally obliged to call out sketchy projects gaining momentum.
As a community we must preempt large scale implosions like #FTX or #LUNA that set the industry back years
Bitget may be the next FTX 🧵
But I'm morally obliged to call out sketchy projects gaining momentum.
As a community we must preempt large scale implosions like #FTX or #LUNA that set the industry back years
Bitget may be the next FTX 🧵
https://twitter.com/hosseeb/status/1643453144033271810
2/ About half a year ago we tried HFT on Bitget and quickly noticed their matching engine is dishonest. I'll give specific examples later in the thread.
I later learned from an ex-Bitget team member that they handled retail taker flow by just B-Booking through an internal desk.
I later learned from an ex-Bitget team member that they handled retail taker flow by just B-Booking through an internal desk.
3/ This is way worse than the usual allegations of CEXs having an internal MM desk.
Masquerading as an order book exchange to your customers while you secretly use a different structure behind the scenes is unequivocally unethical. It's probably illegal in any jurisdiction.
Masquerading as an order book exchange to your customers while you secretly use a different structure behind the scenes is unequivocally unethical. It's probably illegal in any jurisdiction.
4/ Furthermore, the motivation behind this dishonesty was profits. Retail flow, especially with copy trading amplifying the swings, is hugely profitable to trade against.
Bitget did not onboard external MMs for a long time because they were profiting from the flow themselves.
Bitget did not onboard external MMs for a long time because they were profiting from the flow themselves.
5/ How am I confident this happened?
A simple example: we would have an order out on the top of the book, and literally see trades executing at farther prices while our order chilled there. Anyone looking at the UI could've seen this at the time.
A simple example: we would have an order out on the top of the book, and literally see trades executing at farther prices while our order chilled there. Anyone looking at the UI could've seen this at the time.
6/ I don't know if they've cleaned up their act since then, because we immediately ceased all operations on the exchange once we saw the sketchy behavior.
Even if it's better now, the ethical concerns still stand. I wouldn't touch the exchange with a 10 foot pole.
Even if it's better now, the ethical concerns still stand. I wouldn't touch the exchange with a 10 foot pole.
7/ A project that thinks this is an acceptable way to run an exchange should not be getting more funding to expand.
This is hard to see as an investor, so it's especially important that traders with first hand experience keep exchanges honest.
The crypto space deserves better!
This is hard to see as an investor, so it's especially important that traders with first hand experience keep exchanges honest.
The crypto space deserves better!
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