Key takeaways
- Hyperliquid Labs denies any exploits or vulnerabilities related to DPRK wallet activity, ensuring the safety of user funds.
- The HYPE token fell more than 25% from $34 to $25, but rebounded to $27 after Hyperliquid Labs addressed its concerns.
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Hyperliquid, a leading on-chain perpetual futures exchange, has come under scrutiny after allegations surfaced of North Korea-linked wallet activity on its platform.
Security expert Taylor Monahan of MetaMask reported that wallets connected to North Korean hackers traded ETH on Hyperliquide, resulting in liquidations of over $700,000.
“The DPRK does not trade. DPRK testing,” Monahan posted on X, suggesting that the wallets were potentially looking for vulnerabilities in the platform.
The allegations triggered significant user withdrawals, with data from Hashed’s Dune Analytics dashboard showing that more than $194 million in USDC was withdrawn on Monday.
Hyperliquid Labs denied these claims via statements on their Discord channel.
“Hyperliquid Labs is aware of reports circulating regarding activity from purported DPRK addresses,” the team said. “There have been no DPRK exploits – or any exploits for that matter – by Hyperliquid. All user funds are taken into account.
The platform highlighted its strong operational security measures, including a generous bug bounty program and adherence to blockchain analytics best practices.
Hyperliquid Labs also responded to allegations of unprofessional interactions with an external security advisor, stating that the individual had behaved unprofessionally, prompting the team to consult trusted partners instead.
After Hyperliquid Labs resolved the situation, the market reaction began to stabilize.
The controversy sparked significant selling of Hyperliquide’s native token, HYPE, which fell more than 25% from a high of $34 on Sunday to a low of $25 on Monday.
However, the token has since rebounded and is currently trading at $27, according to DexScreener data.
Hyperliquid remains a major player in decentralized finance, accounting for more than 55% of on-chain perpetual futures trading volume, according to data from user uwusanauwu’s Dune dashboard.
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