The Major Bitcoin Short (Part 2): Speculation suggests connections to US government insiders

Previously on The Big Bitcoin Short: a trader initiated a short position on Bitcoin just moments before President Trump’s tariff announcement, resulting in an estimated profit of approximately $160 – $200 million.

Eye, a cryptocurrency investigator who contributed to the narrative by tracing wallets and suggesting that Garrett Jin might be a proxy for a larger network, has now withdrawn from the case, citing concerns for his safety.

Eye halted his investigation into the Bitcoin short case following unverified claims that the trade was associated with a network connected to World Liberty Financial.

Prior to his withdrawal on Oct. 14, Eye expressed the belief that the wallet associated with Garrett Jin could serve as a channel for information flowing from insiders to traders capable of establishing advantageous positions based on policy timing.

“Garret doesn’t appear to be the primary player. He is likely just a frontman, but this was the initial point for tracking the actual insider trading network…

The vital information provided to the HL whale probably originates from a group of insiders who have been exploiting confidential information from White House rumors and official announcements ahead of time.”

The individuals mentioned include World Liberty Financial co-founders Zach Witkoff and Chase Herro, who are associated with Donald Trump Jr., and the suggestion that a leaker may have shared information with parties other than Jin, supporting the “front” theory.

A 30% decline in WLFI tokens just hours before the tariff announcement, while Bitcoin only fell by 3%, has also raised questions within the industry.

WLFI, BTC, SPY sell off (Source: TradingView)

Eye stated he would stop further publications, indicating he had “drilled too deep,” and left the question open regarding who, if anyone, had access to nonpublic policy information.

The controversy originated from the trade that shorted Bitcoin on Hyperliquid just minutes before President Trump’s Oct. 11 tariff announcement, an event previously covered in our reports.

During this period, liquidations across various platforms reached approximately $19 billion within 24 hours, with Hyperliquid reporting widespread account losses.

According to CoinGlass, this liquidation event marked the highest historical single-day dollar totals. CoffeeZilla has also examined the trade, focusing on the final addition to the short, executed at 20:49 GMT, and the tariff announcement at 20:50 GMT, a one-minute interval that continues to shape the discussion regarding what the trader was aware of and when the position was established.

Jin has denied the insider trading narrative and has repeatedly refuted the claims. He stated that the capital belongs to clients, his team operates nodes and provides internal insights, and he has no ties to the Trump family.

He also criticized Binance co-founder Changpeng Zhao for amplifying Eye’s initial thread to a wider audience, expressing gratitude to CZ “for sharing my personal and private information,” and maintained that the short was based on macroeconomic and technical analysis rather than on nonpublic information.

Notably, Jin deleted the tweet denying any connection to President Trump. The complete post stated,

“Hi @cz_binance, thanks for sharing my personal and private information. To clarify, I have no connection with the Trump family or @DonaldJTrumpJr — this isn’t insider trading.”

He also remarked, “There aren’t that many conspiracies in this world. Stop making excuses for your ignorance and unprofessionalism.”

Jin outlined a five-point rationale he claims influenced his positioning, referencing overbought indicators across U.S. tech, China A-share tech, and major cryptocurrency pairs, a positive correlation between crypto and U.S. tech, a shift in U.S.–China trade relations from Sept. 26 to Oct. 11, a general transition from risk-on to risk-off leading up to the move, and significant leverage across markets that could trigger a deleveraging wave similar to past crashes.

He also called for “stability funds” at major venues, arguing that excessive leverage on assets lacking cash-flow support increases the likelihood of chaotic price movements, regardless of direction.

Commentator Quinten Francois questioned why a wallet allegedly used for market activities would correlate so directly with public identities through an ENS path, labeling the connection too convenient and advising caution against over-analyzing social graphs constructed from a limited number of hops.

Attorney John E. Deaton has shifted the conversation toward formal examination, stating that if the allegations are substantiated, regulators should investigate the trades.

The wallet attributed to Jin remains active.

By Oct. 13, the account initiated a new Bitcoin short with an approximate notional value of $496 million at 10x leverage, with a liquidation level near $124,270.

Trackers indicate several million dollars of unrealized profit with Bitcoin trading between $114,000 and $117,000. Two additional Hyperliquid whales opened around $182 million in new shorts across major cryptocurrencies and large-cap altcoins during the same timeframe.

Jin’s background is also under scrutiny.

He managed BitForex from 2017 to 2020. The exchange ceased operations in February 2024 after tens of millions of dollars were withdrawn from hot wallets and users reported frozen balances.

Japan’s Financial Services Agency previously cited BitForex for operating without proper registration, and Hong Kong’s Securities and Futures Commission issued warnings as issues escalated.

Since then, regional reports have highlighted a series of ventures launched after BitForex, followed by a focus on an institutional staking initiative. After Eye’s thread gained traction, observers noted that Jin altered public profiles on social media platforms, removing some project references and changing privacy settings.

The regulatory situation remains unresolved.

Bitcoin is overseen by the Commodity Futures Trading Commission for derivatives, while the Securities and Exchange Commission manages securities cases. This division impacts any potential actions related to trading based on material, nonpublic information.

As of Oct. 15, no U.S. market regulator or law enforcement agency had announced an investigation or public inquiry into the trades from Oct. 11.

Regarding the WLFI aspect, previous public statements from the involved parties have dismissed conflict-of-interest allegations as “nonsense.” None of the individuals mentioned by Eye provided new statements addressing the network claims during the reviewed timeframe.

To summarize the key facts since Oct. 11, here are the main figures and timestamps referenced in public documents:

Item	Detail
Final short add vs tariff post	20:49 GMT order, 20:50 GMT post
Liquidations in 24 hours	About $19 billion across crypto
New BTC short opened Oct. 13	About $496 million notional, 10x, liq. $124,270
Unrealized P&L Oct. 14	Roughly $4–5.7 million with BTC near $114k–$117k
Other Hyperliquid whales	About $182 million of new shorts across majors
Investigator status	Eye halts posts, cites safety

The same framework that guided our initial note continues to apply to market structure over the next two to six weeks.

Open interest and funding rate trends across Bitcoin perpetuals remain the first step in assessing whether leverage is being rebuilt or if the market is still in a cleanup phase.

Stablecoin flows on exchanges can indicate the appetite for adding risk on major platforms.

Equity futures and the dollar surrounding tariff announcements continue to influence intraday ranges for cryptocurrency during trade policy news cycles.

Live panels for open interest, funding, and venue balances are accessible through data providers such as CoinGlass.

What remains uncertain is central to how this narrative develops.

Jin has not disclosed the clients behind the capital. The connection linking public identities to the ereignis.eth and garrettjin.eth trail has not been clarified to a degree that resolves the attribution debate.

Non-social sources have not independently verified Eye’s WLFI allegation, and the parties named have not issued new statements addressing the claim during the reviewed timeframe.

No U.S. regulator has initiated a case or publicly commented on the trades from Oct. 11.

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