A recent incident on the decentralized exchange Hyperliquid has drawn attention from analysts due to significant manipulations involving the XPL token. Trading behaviors left counterparties at a loss totaling millions.
Overview of the Incident
Four large cryptocurrency traders pocketed nearly $47.5 million on Wednesday after allegedly manipulating the price of Plasma’s native token XPL on decentralized exchange Hyperliquid. The XPL token, running on the recently launched Plasma blockchain, surged more than 200% to $1.80 within minutes, triggering one of the sharpest short squeezes seen on the platform.
Suspicious Connections and Analysis
A pseudonymous blockchain analyst, MLM, suggested that wallet 0xb9c may be linked to Tron founder Justin Sun, claiming the address opened long positions worth millions of XPL tokens. Data from Hypurrscan shows the wallet still holding an open XPL position worth $8.6 million with an unrealized profit above $600,000. Sun has previously faced accusations of market manipulation, which he denied.
Issues with Decentralized Exchanges
Other traders reported steep losses, with one user identifying themselves as 'CBB' on X saying they lost $2.5 million betting against the token. There were also reports of liquidations exceeding $9 million across multiple addresses during the price spike, confirming concerns over the vulnerabilities of decentralized exchanges, which are often more susceptible to manipulation.
The situation surrounding the XPL token highlights ongoing challenges faced by decentralized exchanges, which, while offering certain advantages, also contend with high risks of manipulation and unstable liquidity.
