Hyperliquid Faces Scrutiny Over Suspicious Bitcoin, Ethereum Trades

Crypto trading platform Hyperliquid is under scrutiny due to multiple high-leverage trades on Bitcoin and Ethereum that have raised suspicions of potential money laundering activities. Analysts have noted a pattern of unusually large and frequent leveraged trades executed with near-perfect timing, leading to questions about the funds’ source and the traders’ identities.

Blockchain analytics platform reported a series of significant leveraged trades executed on the Hyperliquid platform. According to their analysis, a well-funded trader deposited $5.22 million onto the platform to open highly leveraged long positions in Bitcoin and Ethereum. The trader placed an Ethereum long position at 50x leverage, with an entry price of $1,884.4 and a liquidation point of $1,838.2. Additionally, they opened a Bitcoin long position at 20x leverage, entering at $82,003.9 and setting a liquidation price of $61,182.

The trader had a history of executing short-term leveraged trades with a 100% win rate. The trader netted $2.2 million in profit in just two days. The consistency of these trades has led to speculation that the activity is not random market speculation. Instead, it leans toward a sophisticated laundering operation or insider trading scheme.

One analyst speculated that the funds used in these Hyperliquid trades could be linked to North Korean hackers. The analyst noted that North Korean cybercriminals have been known to test high-frequency trading strategies on crypto platforms as part of money laundering operations. The analyst suggested they could be an attempt to clean illicit funds obtained through hacking. This assumption is based on the Hyperliquid trades’ anonymity and rapid execution.

Another analyst supported this theory by pointing to previous research on high-leverage profits made on Hyperliquid. In early March, the analyst reported that three addresses had generated $2.53 million in profit through high-leverage trades. These addresses were linked to gambling platforms and had also interacted with an exchange favored by hackers. The analyst speculated that the traders might not be insiders but expert gamblers using potentially stolen funds to execute high-risk trades.

Further evidence of potential illicit activity was provided by a crypto analyst. The analyst cited research from a blockchain forensic firm, which described the crypto wallet responsible for some suspicious hyperliquid trades as a “Roobet whale.” This individual had previously liquidated long positions just before a significant market event, indicating that their trades were not based on insider knowledge. Rather, stolen funds are used for gambling.

The reports have reignited concerns about the use of high-leverage trading platforms for illicit financial activities. While leverage allows traders to amplify their positions, it also allows criminals to move and disguise large sums of money rapidly. The anonymity offered by decentralized and offshore exchanges further complicates efforts to track and regulate such transactions. Regulators and blockchain forensic firms will likely increase their scrutiny of similar activities amidst mounting evidence linking Hyperliquid’s high-leverage trades to potentially illicit sources.