A trader on the Hyperliquid platform attempted to manipulate Jelly token prices, potentially leading to a loss of nearly $1 million. Arkham Intelligence provided an analysis of the incident.
Position Manipulation
Arkham Intelligence reported that the trader opened three accounts within five minutes: two contained long positions worth $2.15 million and $1.9 million, respectively, and the third had a $4.1 million short position. This allowed the trader to create conditions for increased leverage and an attempt to drain funds from Hyperliquid.
Liquidation and Consequences
When Jelly's price rose over 400%, the $4 million short position faced liquidation but was too large to be immediately liquidated, transitioning to HLP. The trader's attempt to bypass the system resulted in account restrictions to reduce-only orders, forcing a sale of tokens to recover some funds.
Previous Incidents on Hyperliquid
Hyperliquid has previously faced similar issues. On March 14, the platform increased margin requirements after its liquidity pool lost millions. Other traders intentionally liquidated a $200 million Ether position, causing further repercussions for HLP.
Such incidents highlight the risks of market manipulation in cryptocurrency trading and the need for security updates on platforms like Hyperliquid.
