A group of whales is suspected of manipulating the price of the memecoin $JELLYJELLY, resulting in severe losses for Hyperliquid Vault HLP.
Details of the $JELLYJELLY Manipulation
The whales colluded to raise and then aggressively drop the token's value, significantly impacting the market. The token's price spiked nearly 385% before dropping sharply. Lookonchain discovered a whale opened large short positions on Hyperliquid while buying Jelly tokens off the platform. This strategy led to a $4.5 million loss to the HLP Vault.
Exchanges' Role in the Manipulation
Things escalated as another whale opened a long position, further driving JELLYJELLY's price up. The whales then repurchased the token, causing Hyperliquid's losses to rise to over $12M. ZachXBT, an investigator, found the associated wallet addresses were linked to major exchanges like OKX, MEXC, Bybit, and Binance.
Impact on Hyperliquid and Their Measures
The price manipulation didn't stop at JELLYJELLY; Hyperliquid's token, HYPE, was affected, with its price dropping from $16 to around $13. However, after delisting JELLYJELLY and closing the short position, HYPE's price surged by 25% to $14.5 currently. Hyperliquid is actively ensuring platform stability by reimbursing affected users and maintaining almost $220 million in deposits in the HLP Vault, with a net income of $700k in the past 24 hours.
Hyperliquid continues its efforts to stabilize the platform and compensate users impacted by the $JELLYJELLY price manipulation.
