Drama as Hyperliquid Delists JELLYJELLY After $12M Whale Manipulation
Hyperliquid delisted JELLYJELLY after a whale manipulation incident caused $12M losses. Validators intervened, restricting accounts and halting trading.
Hyperliquid, a decentralized perpetual exchange, suffered its second major whale manipulation incident two weeks after traders exploited the Solana memecoin JELLYJELLY on Wednesday, forcing the platform to delist the token.
The attack left $12 million in unrealized losses in Hyperliquid’s liquidity vault before validators swiftly stabilized the situation.
How the Chaos Unfolded
The drama began when a whale with multiple wallets executed a coordinated attack. First, two of his wallets, “0x20e8” and “0x67Fe,” opened two $2.15M and $1.9M long positions on JELLYJELLY. Simultaneously, another wallet, “0xde96″, opened a massive $4.1M short position on the token in an attempt to build up leverage.
The $4.1M short position in JELLY JELLY was quickly liquidated when its price increased. However, large funds made the position too large to liquidate normally, so they moved it to the Hyperliquidity Provider Vault (HLP).
Meanwhile, the whale began withdrawing collateral from “0x20e8” and “0x67Fe”, as the price of JELLYJELLY had pumped by about 385%.
As Hyperliquid scrambled to contain the fallout, competing centralized exchanges moved to benefit from the chaos. Within an hour, both Binance and OKX listed JELLYJELLY perpetual contracts, a move that could have destabilized the exchange.
Hyperliquid Takes Emergency Measures
Hyperliquid’s validators quickly responded by adjusting the oracle price of JELLYJELLY to $0.0095—the level at which the whale initially shorted the token—halting trading and delisting the token. Additionally, authorities restricted the whale’s accounts, leading to a $1 million loss if they maintain the withdrawal restrictions.
The protocol announced, “After evidence of suspicious market activity, the validator set convened and voted to delist JELLY perps. ” The team also assured users that the Hyper Foundation would reimburse affected traders, excluding flagged addresses linked to the manipulation.
This attempt at market manipulation was Hyperliquid’s second major incident in March. Earlier, a whale profited $1.86 million after placing a $306 million ETH long position, causing a short-lived panic.
Despite the turmoil, Hyperliquid reported that its HLP vault still holds $220 million in deposits and recorded a $700,000 profit in the last 24 hours. However, its native token, HYPE, dropped 10.48% to $14.42 following the incident, extending its monthly losses to over 20%, according to data from CoinMarketCap.
