HyperLiquid, a decentralized perpetual trading platform, has become the center of a high-stakes controversy this week. Earlier, a prominent blockchain security researcher, Taylor Monahan, alleged that North Korea-backed cyber actors were operating on the platform.
The claims, shared via an X post, triggered a massive outflow of funds from the blockchain’s native token HYPE and sent shockwaves through the crypto community.
HyperLiquid Users Panic Amid $249 Million Withdrawal
Recent data from Dune Analytics revealed a staggering $249.1 million in Circle’s USDC net outflows from HyperLiquid on Monday alone. This was followed by an additional $22.2 million on Tuesday.
Users were alarmed when Monahan named 12 blockchain addresses allegedly linked to North Korea’s Democratic People’s Republic of Korea (DPRK). According to Monahan, these addresses were active on HyperLiquid, with one traceable as far back as October 2.
She voiced her concerns in a series of posts, warning that these actors might be familiarizing themselves with the platform to launch a future attack. Monahan expressed concern that skilled North Korean hackers are well-acquainted with the platform. She reiterated her offer to help HyperLiquid strengthen its defenses.
Hype Token Whiplash Amid Uncertainty
This substantial outflow came months after the decentralized finance platform set a new standard for airdrops with its HYPE token shortly after its launch. The project distributed 310 million, worth $1.2 billion HYPE tokens to its community.
The allegations significantly affected HyperLiquid’s newly launched native token, Hype. Over the weekend, the token’s value surged to $34.5, but by Monday, it had sharply dropped to $26.
Despite a slight recovery of 5.4%, bringing the price up to $29.63, the token showed signs of volatility. This comes as concerns over the platform’s security and the allegations grew.
This dramatic price fluctuation and user withdrawal came just months after HyperLiquid set a new benchmark for DeFi projects with its airdrop of the HYPE token. The platform distributed a massive 310 million HYPE tokens, worth a staggering $1.2 billion, to its community. This generated excitement and widespread attention.
HyperLiquid Pushes Back Against Exploit Claims
Despite these reassurances, the platform faces growing pressure as North Korea’s track record of high-profile crypto hacks looms large. These include the infamous $600 million Ronin sidechain exploit in 2022, underscoring the sophistication of DPRK-backed hacker groups.
HyperLiquid quickly responded, denying any breach and assuring users that no funds were compromised. On its discord channel, HyperLiquid emphasized that there has been no DPRK exploit or any exploit on the blockchain.
Despite the reassurances, the platform might still face pressure due to North Korea’s history of major crypto hacks. This includes the $600 million Ronin attack in 2022, which raised further concerns.
