Whale nets $6.2M from Hyperliquid exploit

An unidentified crypto whale exploited the decentralised exchange Hyperliquid (CRYPTO:HYPE), profiting $6.26 million and retaining over 10% of the JELLY (CRYPTO:JELLY) memecoin supply, valued at nearly $2 million.

According to blockchain intelligence firm Arkham, the whale manipulated liquidation parameters by opening three large trading positions within minutes.

These included two long positions worth $2.15 million and $1.9 million, alongside a $4.1 million short position that offset the longs.

The price of JELLY surged 400%, but due to its size, the short position was absorbed into Hyperliquid’s Provider Vault instead of being liquidated.

Blockchain investigator ZachXBT revealed that five addresses linked to the exploiter still hold approximately 10% of JELLY's supply on Solana.

“All JELLY was purchased since March 22, 2025,” ZachXBT stated in a Telegram post on March 26.

Despite Hyperliquid freezing and delisting JELLY citing "evidence of suspicious market activity," the whale continues selling tokens.

This incident highlights vulnerabilities in decentralised finance (DeFi), where speculative projects often lack sustainability.

“The JELLY incident is a clear reminder that hype without fundamentals doesn’t last,” commented Alvin Kan, COO at Bitget Wallet.

Hyperliquid’s response included plans to reimburse affected users automatically, excluding addresses tied to the exploiter.

However, this intervention raises concerns about decentralisation, as it blurs lines between decentralised ethos and centralised control.

The JELLY exploit follows other memecoin scandals, including the collapse of MELANIA (CRYPTO:MELANIA) and LIBRA (CRYPTO:LIBRA) tokens due to insider schemes.

These incidents underscore risks associated with speculative trading in volatile markets.

Hyperliquid’s case also reflects broader trends in DeFi, where rapid capital movement exposes projects lacking utility.

Kan emphasised that projects built on speculation will continue facing scrutiny in unforgiving markets.

The Hyper Foundation’s reimbursement initiative aims to mitigate damages but leaves questions about long-term trust in decentralised exchanges and their ability to prevent manipulation effectively.

At the time of reporting, the Hyperliquid (HYPE) price was $14.68.