Hyperliquid Labs, a leading on-chain perpetual futures exchange, faced scrutiny after allegations emerged of suspicious wallet activity on its platform. Reports suggested that certain wallets had traded ETH on Hyperliquid, resulting in over $700,000 in liquidations. Security expert Taylor Monahan of MetaMask indicated that these wallets were probing the platform for potential vulnerabilities.
“Certain entities don’t trade. They test,” said Monahan, implying the potential for a systematic evaluation of the platform’s security. The allegations triggered significant user withdrawals, with data from Hashed’s Dune Analytics dashboard showing over $194 million in USDC withdrawn on Monday.
In response, Hyperliquid Labs issued a statement denying any exploits or vulnerabilities linked to the suspicious wallet activity. “Hyperliquid Labs is aware of reports circulating regarding activity by supposed addresses,” the team stated.
Hyperliquid under scrutiny amid withdrawals
“There has been no exploit—or any exploit for that matter—of Hyperliquid. All user funds are accounted for.”
The platform emphasized its strong operational security measures, including a comprehensive bug bounty program and adherence to best practices in blockchain analytics. Additionally, Hyperliquid Labs addressed claims of unprofessional interactions with an external security advisor, explaining that the individual behaved unprofessionally, prompting the team to seek advice from trusted partners instead.
After addressing the situation, the market reaction began to stabilize. The controversy initially caused a significant drop in Hyperliquid’s native token, HYPE, which fell over 25% from $34 to $25. However, the token has since rebounded and is currently trading at $27.
Hyperliquid remains a significant player in decentralized finance, commanding over 55% of on-chain perpetual futures trading volume, according to Dune Analytics. As the situation unfolds, the platform’s resilience and prompt response have been pivotal in restoring user confidence.
