A dramatic price spike in the newly launched Plasma blockchain’s (XPL) token on decentralized exchange Hyperliquid saw four cryptocurrency whales amass a staggering $47.5 million profit. This surge followed accusations of manipulation, with one trader suffering losses exceeding $4.5 million from this activity. Concerns regarding the reliability of decentralized trading platforms are surfacing following this incident.
The largest whale, wallet 0xb9c, profited an estimated $15 million as the alleged orchestrator of the price increase on Hyperliquid. Blockchain data platform Spot On Chain noted, “This wild short squeeze marks one of the wildest examples we’ve seen.” The platform further urged Hyperliquid to address these allegations.
The whales’ actions caused multiple other traders to suffer losses, with one trader losing a staggering $4.5 million on an XPL position. Another user, CBB, recounted suffering a $2.5 million loss from a short position in XPL, highlighting the potential for vulnerability in isolated market strategies.
This incident follows a previous exploit on Hyperliquid involving the Jelly my Jelly (JELLY) memecoin that saw a $6.26 million loss due to a technical vulnerability in its liquidation parameters. Concerns about security on decentralized platforms continue to grow.
Onchain sleuth analysis points towards Justin Sun, founder of Tron Network, as a potential orchestrator behind one of the whale wallets. Blockchain data shows wallet 0xb9c, associated with potentially being owned by Justin Sun, initiated long positions on millions of XPL tokens on Hyperliquid. This action cleared out the entire order book and liquidated traders.
Cointelegraph reached out to both Hyperliquid and Justin Sun for comment regarding these allegations.