The restrictions follow a volatile Oct. 10 launch that saw open interest exceed $10 billion on only $45 million of open margin within one hour. The venue allows up to 1,000x leverage, contributing to net trading losses of $18.2 million according to an Oct. 10 snapshot, with $12.6 million distributed as rewards to $PAPER stakers. Papertrade's own documentation identifies the manipulation of the best bid and offer as an unresolved protocol risk.
Tuesday, October 20, 2026
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Papertrade Restricts New Trading Exposure After $20M Manipulation Claim
Crypto9 days ago
The synthetic perpetual exchange is limiting new positions onchain and via relayers following claims that users exploited the platform's price execution model. X user @Dr_bobo54 alleged that two wallets used roughly $20 million in orders on Hyperliquid to shift ETH quotes by 10–20 basis points while holding larger long positions on Papertrade, which uses the midpoint of Hyperliquid's best bid and offer for its pricing. Papertrade has not confirmed any losses, and reports that some traders were blocked from closing their positions remain unverified.
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