Trader Alleges $5M Loss In Coordinated Market Squeeze

A major cryptocurrency platform is facing public scrutiny after an X user named "xunlu" alleged losing more than 5 million USDT due to extreme price volatility in an offshore perpetual futures market. The dispute centers on whether a massive price spike was a natural market reaction or the result of a coordinated short squeeze.

The incident occurred on September 3 at 5:44 a.m. UTC+8, when the trader claims over 30 funding-rate arbitrage positions were forced into liquidation within a matter of minutes. During this window, the AKEUSDT perpetual contract surged from approximately $0.0076 to nearly $0.045. The increase of roughly 492 percent rapidly diminished the margin supporting short futures positions on the platform.

The trader characterized the episode as an orchestrated market manipulation event rather than standard trading activity. In response to the multimillion-dollar wipeout, xunlu has demanded the exchange publish its trading records, liquidation data, and risk-control logs so the system's calculations can be independently reviewed.

Arbitrage Strategy Liquidated

The affected trades were described as funding-rate arbitrage positions. This strategy typically aims to capture recurring payments generated by differences in perpetual market positioning, rather than attempting to profit from a token’s directional movement. Although these setups often combine offsetting positions to limit exposure to sudden price swings, they remain vulnerable to collateral risks if a leveraged leg moves too rapidly for the user to deposit additional margin.

Publicly available aggregated spot charts confirmed heavy market volatility during the September 3 session. However, the highest combined spot reading fell below the contract peak cited by the trader. While the exact cause of this gap remains unexplained, reports indicate it could stem from differences between the futures contract, external spot exchanges, or the specific index used to produce the mark price.

The trader pointed to a previous "TUT" liquidation incident where affected users received compensation from competing exchanges. However, the platform in the current dispute maintains the AKE volatility was strictly an inherent market risk associated with leveraged trading.

Index Mechanics Questioned

The exchange’s customer support team formally rejected the trader’s claims, stating an internal review found no faults in its pricing model, risk controls, or liquidation engine. Representatives noted that the platform does not offer AKE through its own spot order book.

Instead, the AKEUSDT perpetual contract’s mark price is calculated using data gathered across multiple external spot venues. This multi-market index is designed to mitigate the impact of an abnormal price print on any single exchange. The platform asserted that AKE recorded large price swings across several external exchanges and on-chain markets, and that its own index and mark-price processes functioned exactly as intended.

Currently, neither a market regulator nor an independent investigator has verified the 5 million USDT loss or issued a public finding on the manipulation allegations.