A recent market manipulation incident on HyperLiquid, a decentralized trading platform, has sparked concerns about its security protocols and risk management. The incident involved the sudden surge in price of $JELLY token, leading to significant losses and raising questions about the platform’s vulnerability to such manipulations. blockchain analytics firm Arkham Intelligence revealed that an anonymous address initiated a short position on HyperLiquidX platform, causing market manipulation. This action led to substantial unrealized losses for the platform’s treasury, reaching approximately $12 million. A further price surge in the token, followed by liquidation, resulted in a potential loss of up to $240 million if the price hadn’t been halted at a specific level. 0xde95 is suspected to be behind the attack. Arkham Intelligence’s investigation revealed that the trader exploited system vulnerabilities by opening long and short positions with strategic timing and withdrawing funds before the platform could process the liquidation. While HyperLiquid claims their users’ funds are secure, this incident raises concerns about its commitment to decentralization. Following the incident, the platform announced delisting of $JELLY token to prevent further losses and promised to compensate affected users. However, questions remain regarding the platform’s ability to effectively handle such situations. This incident comes after a similar event in March where HyperLiquid suffered a loss of $4 million due to market manipulation involving Ethereum.