Wintermute founder Evgeny Gaevoy has dismissed widespread speculation that his firm intends to sue Binance over losses from October’s historic crypto crash, stating “literally nothing changed” since his earlier clarifications and the company never had such plans.
The clarification comes after days of social media speculation linking the market maker to potential litigation over auto-deleveraging executions during the October 10-11 flash crash that liquidated $19 billion in positions and briefly erased $600 billion from the crypto market cap.
Gaevoy labeled the rumors as “larp” when directly asked whether he had signed a non-disclosure agreement with Binance or coordinated with other market makers to pursue joint legal action.
Former Binance CEO Changpeng Zhao amplified the denial by quote-tweeting Gaevoy’s post, writing, “If someone made you believe otherwise, it’s time to click unfollow.“
October Crash Stir ADL Controversy
The October 10 selloff was triggered by President Donald Trump’s announcement of 100% tariffs on Chinese imports, creating panic across global markets.
Bitcoin plummeted to $104,782 during the 48-hour period, while Ethereum and major altcoins lost between 15% and 20% of their value.
Binance’s trading infrastructure buckled under the strain, with API failures returning HTTP 503 errors and Reduce-Only orders being rejected during peak volatility.
The exchange’s Auto-Deleveraging mechanism was activated, resulting in short liquidations at prices up to five times the prevailing market rates.
Binance spent $188 million from its insurance fund and issued $283 million in refunds for oracle-related depegs, though ADL losses were excluded from compensation.
Gaevoy had previously stated in a video that Wintermute was “ADL’d at completely ridiculous prices” and mentioned that the firm was evaluating legal options. These remarks fueled speculation about the lawsuit.
On-chain analysis of Wintermute’s 10 tracked wallets across Ethereum, Arbitrum, and Solana revealed a 12% decline in the portfolio, dropping from $637 million to $572 million.
No large withdrawals exceeding $10 million or liquidation patterns involving Aave or Compound were detected; however, a single 1,000 BTC inflow worth approximately $61 million occurred on October 4, just days before the crash.
Market Structure Under Scrutiny
The October event exposed structural vulnerabilities in crypto derivatives markets, where notional liquidation figures vastly overstate actual capital losses.
Speaking with Cryptonews, Sam Seo, chairman of the Kaia DLT Foundation, said the actual capital lost by traders is likely “in the range of 5% to 15% of the headline number,” translating to between $950 million and $2.85 billion in real losses.
He warned that “the remaining 85-95% was simply phantom leverage, synthetic exposure that was rapidly unwound.“
Bitcoin futures open interest collapsed by more than 30% during the selloff, erasing over $10 billion in notional positions in one of the largest single-day declines on record, comparable to the May 2021 liquidation and the FTX unwind in 2022.
Patrick Heusser, head of lending and TradFi at Sentora, also explained that “liquidations [are] a speedometer for deleveraging intensity, not a profit and loss statement,” noting that exchanges settle these events using margin and insurance funds.
Despite the chaos, Bitcoin recovered to $114,000 by October 13, supported by $420 million in spot ETF inflows that helped stabilize prices.
‘Uptober’ Turns Red for First Time Since 2018
According to Reuters, October marked Bitcoin’s first monthly loss since 2018, snapping a seven-year winning streak and ending nearly 5% lower for the month despite reaching an all-time high above $126,000 just days before the crash.
The reversal came as broader risk appetite weakened, with Federal Reserve Chair Jerome Powell pushing back against market expectations for continued rate cuts and a government shutdown blocking crucial economic data.
Analyst Scott Melker has earlier called Bitcoin’s resilience “a small miracle” after the liquidation, stating “I don’t think we’re entering a bear market” and noting “this isn’t 2017. Nor is it 2021. What happened last week was purely structural.“
Bitcoin opened November trading at $106,961, down 0.7% as whale profit-taking and continued ETF outflows pressured prices below $107,000.
For the first time in seven months, institutional demand has fallen below the pace of new coin issuance, indicating that large buyers are stepping back.
Source: X/@caprioleioMarkets now price a roughly 70% chance of a 25-basis-point Fed rate cut in December, down from 94% a week earlier, as policymakers deliver mixed signals on growth and inflation.
Analysts remain cautiously optimistic that November could restore typical seasonal strength, as Bitcoin has historically averaged returns exceeding 40% during the month.
Speaking with Cryptonews, MEXC Research Chief Analyst Shawn Young noted that “accumulation of coins by major market participants, the trade agreement between Washington and Beijing, and moderately positive stock market performance are paving the way for a possible recovery in November.“
VALR CEO Farzam Ehsani also warned that the market structure remains fragile, stating, “any change in the Fed’s tone or a new round of geopolitical tension could dramatically shift the balance of power,” keeping Bitcoin likely range-bound between $107,000 and $113,000 as participants await clearer macro signals.
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