Brother Ma Ji, Huang Li Cheng, suffered a loss of 1.6 billion! Is there any protection for virtual money investment liquidation in Taiwan?

Maji Brother Huang Licheng suffered a forced liquidation while operating a high-leverage Ethereum position on Hyperliquid, with a profit of 44.5 million USD (approximately 1.37 billion TWD) turning into a loss of 10 million USD (approximately 300 million TWD) in just over 20 days, resulting in a total loss of nearly 1.67 billion TWD. Financial Supervisory Commission Chairman Peng Jinlong responded that he would promote the virtual asset service law as soon as possible to establish an investor protection mechanism.

Why Did the Largest Forced Liquidation in History Occur?

Just a few days after Bitcoin reached its all-time high, cryptocurrency market traders faced the largest liquidation wave in history on October 10. The market's extreme volatility was mainly due to U.S. President Trump threatening to impose high tariffs on China again, causing cryptocurrency prices to plummet by 12%, resulting in a “free fall” crash.

Data tracking agency Coinglass stated that the market experienced “the largest liquidation event in cryptocurrency history” within 24 hours. Positions worth over $19 billion (approximately NT$58 billion) were forcibly liquidated, involving over 1.66 million traders, with more than $7 billion (approximately NT$21 billion) of positions being liquidated in just one hour on Friday.

What is a forced liquidation? Investors can borrow money from exchanges to buy Bitcoin. For example, if you have 10,000 USD but use leveraged trading (borrowing money to amplify your investment), you buy 50,000 USD worth of Bitcoin, expecting to profit when Bitcoin rises. However, if the price of Bitcoin drops too much, the exchange fears that it won't be able to get back the money it lent you, so it will “force sell” your Bitcoin to recover the funds, but the investor will also suffer significant losses. This situation of being forced to sell is called a forced liquidation.

Coinglass also pointed out that the actual total amount of liquidations may be much higher than this figure, as exchanges may not report relevant data in real-time. For example, the world's largest cryptocurrency exchange Binance only reports one liquidation order per second. Experts say that some estimate the scale of this wave of liquidations could exceed $30 billion (approximately NT$920 billion), and the market is closely watching whether it will trigger a larger chain reaction.

Brother Ma Ji Huang Li Cheng lost 1.6 billion in 20 days from profit to loss

The cryptocurrency market is witnessing the “largest liquidation disaster in history,” leaving countless investors severely impacted. Among them, the most notable is Huang Li-Cheng (Brother Maji). He operated a high-leverage Ethereum position on the decentralized derivatives exchange Hyperliquid, only to suffer a forced liquidation, turning from a substantial profit to a significant loss in just over 20 days, with losses amounting to as much as 54.5 million USD (approximately 1.67 billion TWD).

According to the on-chain data platform Arkham, Ma Ji Da Ge Huang Li Cheng originally had a paper profit of over 44.5 million USD (approximately 1.37 billion TWD), but due to the market's violent fluctuations, he returned all the profits and ultimately suffered a loss of about 10 million USD (approximately 300 million TWD). This roller coaster experience from heaven to hell has become the most representative case of this liquidation wave.

Facing massive losses, Huang Licheng displayed a carefree attitude. He reposted related reports on social media, simply writing: “Was fun while it lasted,” showing a rather calm demeanor. By 3 AM on the 12th, Brother Maji posted a screenshot showing that Ethereum and Bitcoin had risen back to $2.28 within 24 hours, with an increase of 150%, and expressed in English, “Cryptocurrency controls my world.”

This open-minded attitude reflects Huang Licheng's profound understanding of market fluctuations as a seasoned cryptocurrency investor. However, for most retail investors, a loss of 1.6 billion TWD may represent their entire life savings, and this extreme volatility is at the core of the concerns that regulators have.

Insider Trading Controversy: $160 Million Precise Short Selling Raises Questions

Amidst the chaos in the market, two trades on the decentralized exchange Hyperliquid became the focus of everyone's attention. Data shows that these two mysterious accounts suddenly shorted Bitcoin and Ethereum just before the market crash. As the market collapsed, these two accounts successfully closed their positions, with total profits reaching 160 million dollars, and subsequently withdrew all the profits.

Such precise trading timing calculated in “minutes” has immediately triggered a tsunami of doubts on social media, with claims that it is likely a case of “insider trading” using undisclosed information. What is short selling? If you think the price of something will soon drop, you can make money by “shorting” it. Suppose you expect that Bitcoin might fall; you first “borrow” 100 Bitcoins to sell. If Bitcoin does drop afterwards, you can then buy back Bitcoin at a lower price to return it, and the difference in price is your profit.

However, some believe that these trades were established only after the Beijing government announced new restrictions on the export of rare earth minerals. Rare earths are key materials for high-tech industries, and this move by China is seen as a strong countermeasure against the U.S. Therefore, these traders may not have insider knowledge of Trump's decisions, but rather are making trades based on a keen interpretation of the geopolitical situation.

Can Taiwan's Virtual Asset Service Act Protect Investors?

At the same time that there has been a massive liquidation in cryptocurrencies, regulatory agencies in various countries are strengthening regulations. Japanese regulators plan to ban insider trading in cryptocurrencies to enhance market transparency and protect investors, with legislation aimed for 2026. Taiwan's “Virtual Assets Service Act” is a draft proposed by the Financial Supervisory Commission to regulate Virtual Asset Service Providers (VASP), with the goal of improving the market and protecting investor rights.

Core Highlights of Taiwan's Virtual Asset Service Act:

Licensing Regulation: All VASPs must apply for a license from the regulatory authorities and meet specific capital and qualification requirements.

Customer Asset Protection: Customer assets must be held separately from the VASP's own property and do not belong to its bankruptcy estate in the event of bankruptcy.

Stablecoin Management: Stablecoin issuers must obtain permission and have sufficient reserve assets stored in domestic financial institutions.

Prohibition of Manipulative Behavior: Prohibit virtual asset fraud and manipulative behavior, granting regulatory authorities the right to inspect.

After the recent forced liquidation incidents in the virtual currency market, Financial Supervisory Commission Chairman Peng Jinlong stated during a legislative inquiry on October 13 that virtual assets have the characteristic of extreme volatility, explaining the uncertainty and high risks of that market. Therefore, it is even more necessary to establish an investor protection mechanism through a specialized legal framework. “I hope to expedite the review; after the specialized law is passed, there will still be 7 subordinate laws to be implemented.”

However, this time the forced liquidation incident of Brother Ma Ji, Huang Li-Cheng, occurred on the decentralized exchange Hyperliquid, which typically operates outside the jurisdiction of any single country's regulations. Taiwan's Virtual Asset Service Act primarily targets centralized exchanges operating in Taiwan, with limited jurisdiction over overseas or decentralized platforms. This reveals the fundamental dilemma of cryptocurrency regulation: there is an inherent contradiction between the borderless nature of decentralized finance and the territorial limitations of national regulatory powers.

Ukrainian crypto influencer's death shocks the industry

According to reports from foreign media, Ukrainian cryptocurrency influencer Konstantin Galich was recently found dead in a car. The death of the well-known cryptocurrency influencer and entrepreneur Konstantin Galich has been confirmed; he was found dead on the 11th inside a Lamborghini supercar, located in the Obolon district of Kyiv. According to preliminary investigations by the police, the cause of death was suicide.

Konstantin Galich is also well known by another name, Kostya Kudo, who is the CEO of Cryptology and has over 66,000 followers on the IG platform. According to friends and family, he had been experiencing emotional distress due to financial difficulties prior to the incident, and there are suspicions that he left a suicide note. This tragic event adds a heavier tone to the current liquidation wave.