Stunning Manipulation in Meme Coin: Hyperliquid Suspends Transactions

Recently, a notable development in the cryptocurrency market has been the manipulation attempt related to the popular meme coin POPCAT. A trader's attempt to artificially inflate the price led to the decentralized perpetual platform Hyperliquid halting deposits and withdrawals. This resulted in approximately $4.9 million in losses for the Hyperliquid platform.

On Wednesday, analysts tracking on-chain data identified a large-scale position clearly intended for manipulation in the POPCAT trading pair. The analyses revealed that the attacker first withdrew $3 million worth of USD Coin from the OKX exchange and then divided these funds into 19 different wallets to transfer them to Hyperliquid. Subsequently, 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 of around $20 million at the level of $0.21 to create the impression of strong buying interest in the market. However, this wall was quickly pulled back, and liquidity collapsed rapidly. As a result of this collapse, the POPCAT price experienced a sharp drop within seconds, and all opened long positions were liquidated. This situation caused significant losses for the Hyperliquidity Provider (HLP) who took over the positions.

On-chain analyst MLMabc emphasized that this move was not an error but a deliberate attack. The attacker's aim was to create high-volume fake demand to raise the POPCAT price, then remove the wall to drain liquidity and put the protocol in a tough spot. However, the anticipated domino effect did not occur; with the price crash, the attacker's own positions also vanished, and their $3 million collateral was completely wiped out.

The Hyperliquid team stated that they manually closed the positions following this incident and halted all operations until the issue was resolved. This event has once again highlighted the platform's shortcomings in security and liquidity management, reminiscent of the JELLYJELLY manipulation that occurred in March. The crypto community agrees that the increasing manipulation attempts, especially in the meme coin space, have once again raised concerns about the risks in decentralized perpetual exchanges.