Wintermute CEO calls exchange insolvency rumors unfounded

Wintermute CEO Evgeny Gaevoy stated on X that the leverage structure in the current cryptocurrency cycle differs from the past, making recent rumors of exchange insolvency unfounded. He explained that for an exchange to truly face insolvency, it would require substantial leveraged positions. While the previous cycle's leverage was centered on unsecured lending platforms like Genesis and Celsius, current leverage primarily stems from perpetual futures, which Gaevoy described as a more orderly system. He added that exchanges have also significantly improved their margin management capabilities. Citing the last cycle, he noted that the only exchange to suffer real losses from the collapse of Three Arrows Capital (3AC) was Deribit, which had granted it a special credit line, a risk he believes no exchange is taking today. Gaevoy also asserted that no exchanges are currently operating like FTX by investing user deposits in illiquid assets. He concluded that the only plausible risks are hacking or losses from customer liquidations, both of which are largely manageable with advanced monitoring systems and tools like Auto-Deleveraging (ADL). His comments follow FUD that spread on X on Feb. 4 alleging that Binance was insolvent, a claim that founder Changpeng Zhao has completely denied.