Whale loses $8.2M in leveraged ARC trade on Lighter

CoinTelegraph

by Amin Haqshanas

February 26, 2026

AI-Generated Deep Dive Summary

A massive leveraged long position in the ARC perpetuals market collapsed on the decentralized derivatives platform Lighter, resulting in a $8.2 million loss for a large crypto trader. The failure triggered auto-deleveraging mechanisms, which helped limit losses for liquidity providers to around $75,000. This incident highlights the risks of leveraged trading, particularly in volatile markets like cryptocurrency. The whale built a significant long position over several days, driving total open interest in the ARC market to approximately $50 million. The trade unraveled when ARC's price dropped sharply around 6:00 pm ET on Wednesday. About $2 million of the position was liquidated through order book executions, while the remaining portion was moved into Lighter’s liquidity provider pool (LLP) under a high-risk strategy category. This incident underscores the importance of risk management in leveraged trading, especially on decentralized platforms. While auto-deleveraging mechanisms can help mitigate losses for market participants, they also demonstrate how quickly and severely crypto markets can shift. For traders and platform operators alike, understanding and managing these risks is critical to navigating the volatile cryptocurrency landscape.

Verticals

cryptoblockchain

Originally published on CoinTelegraph on 2/26/2026