Stunning Manipulation in Meme Coin: Hyperliquid Suspended Transactions

Recently, a notable development in the cryptocurrency market was a manipulation attempt involving the popular meme coin POPCAT. A trader's efforts to artificially inflate the price led the decentralized perpetual platform Hyperliquid to halt deposit and withdrawal operations. This situation resulted in approximately $4.9 million in losses for the Hyperliquid platform.

During the incident on Wednesday, analysts tracking on-chain data identified a large-scale position clearly aimed at manipulation in the POPCAT trading pair. The analyses showed that the attacker first withdrew $3 million worth of USD Coin from the OKX exchange, distributing the funds into 19 different wallets before transferring them to Hyperliquid. Then, the attacker aggressively opened long positions on POPCAT, accumulating trades worth 125.14 million HYPE (approximately $26.28 million).

The trader placed a buy wall worth about $20 million at the $0.21 level to create the impression of strong buying interest in the market. However, this wall was rapidly removed, and liquidity collapsed quickly. As a result of this collapse, the POPCAT price plummeted sharply within seconds, and all opened long positions were liquidated. This caused significant losses for the Hyperliquidity Provider (HLP) taking over the positions.

On-chain analyst MLMabc emphasized that this movement was not an error but a deliberate attack. The attacker's goal was to create a high-volume fake demand to inflate the POPCAT price, then remove the wall to drain liquidity and put the protocol in a difficult situation. However, the expected domino effect did not occur; along with the price collapse, the attacker’s own positions also disappeared, and the $3 million collateral was completely wiped out.

The Hyperliquid team reported that they manually closed positions after this incident and halted all operations until the issue was resolved. This event, reminiscent of the JELLYJELLY manipulation that occurred in March, once again highlighted the platform's shortcomings in security and liquidity management. The cryptocurrency community agrees that the increasing manipulation attempts, particularly in the meme coin space, have brought the risks of decentralized perpetual exchanges back into focus.