A trader tried to manipulate the Hyperliquid exchange using the meme coin Jelly my Jelly (JELLY) but faced a loss of nearly $1 million. Events unfolded swiftly, and this is not the first case of manipulation on the platform.
Attempt to Manipulate with JELLY
According to blockchain analytics firm Arkham Intelligence, the trader created three accounts on Hyperliquid within minutes, placing large long and short positions to exploit the platform’s liquidation system. Despite the effort, a 400% rise in JELLY's price led to the closure of his $4 million short position, resulting in losses.
Hyperliquid's Response to the Incident
Hyperliquid responded by restricting the trader's accounts to reduce-only orders, forcing him to sell assets to recover funds. The exchange also froze and delisted JELLY, leading to losses and profits on the trader's other two accounts. Arkham reported that the trader managed to withdraw $6.26 million, but $1 million remains blocked, leaving the outcome uncertain.
Similar Incident on Hyperliquid
This incident is not the first for Hyperliquid. Earlier this month, a large trader intentionally liquidated a $200 million position in Ether, causing Hyperliquidity Provider Vault to lose $4 million.
The events surrounding Hyperliquid raise questions about the platform's security and reliability, especially in light of increasing incidents of manipulation. It also highlights the risks associated with using meme coins and highly volatile assets on trading platforms.
