Stunning Manipulation in Meme Coin: Hyperliquid Suspends Transactions

Recently, a notable development in the cryptocurrency market involved a manipulation attempt related to the popular meme coin POPCAT. The efforts of a trader to artificially inflate the price led to the decentralized perpetual platform Hyperliquid halting deposits and withdrawals. This situation resulted in an estimated loss of approximately 4.9 million dollars for the Hyperliquid platform.

During the incident that occurred on Wednesday, analysts tracking on-chain data identified a large-scale position clearly intended for manipulation within the POPCAT trading pair. Analysis showed that the attacker first withdrew 3 million dollars worth of USD Coin from the OKX exchange and then transferred those funds to Hyperliquid by splitting them into 19 different wallets. Afterwards, they aggressively opened long positions on POPCAT, accumulating around 125.14 million HYPE (approximately 26.28 million dollars) in trades.

In an attempt to create the impression of strong buying interest in the market, the trader placed a buy wall worth about 20 million dollars at the 0.21 dollar level. However, shortly after, this wall was completely pulled back, and liquidity rapidly collapsed. As a result of this collapse, the POPCAT price experienced a sharp decline in seconds, leading to the liquidation of all opened long positions. This situation caused significant losses for the Hyperliquidity Provider (HLP) that took over the positions.

On-chain analyst MLMabc emphasized that this move was not a mistake but rather a deliberate attack. The attacker's goal was to create a high-volume false 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 were also wiped out, completely erasing the 3 million dollars in collateral.

The Hyperliquid team reported that they manually closed the positions following the incident and halted all operations until the issue was resolved. This event brought to mind the manipulation of JELLYJELLY that took place in March, once again highlighting the platform's deficiencies in security and liquidity management. The crypto community agrees that the increasing manipulation attempts, especially in the meme coin sector, have brought the risks associated with decentralized perpetual exchanges back into focus.