HyperLiquid users are flagging fund exodus amid links with North Korean hackers.
By Godfrey Benjamin
Edited by Julia Sakovich
Updated
3 mins read
HyperLiquid, a decentralized exchange (DEX) and layer-1 blockchain, is currently in the spotlight. The platform, which has built its reputation around offering high-leverage trading opportunities, is grappling with issues threatening its future stability.
On Monday, a massive outflow of Circle’s USDC USDC $1.00 24h volatility: 0.0% Market cap: $52.19 B Vol. 24h: $13.92 B , totaling $60 million, raised alarm among crypto analysts. HyperLiquid suspects North Korean hackers may test the platform’s vulnerabilities in preparation for a potential attack.
This incident is alarming for a platform that relies heavily on USDC as collateral for its transactions. According to Hashed Official’s Dune tracker, this represents a notable portion of the exchange’s holdings.
While the outflow is significant, the exchange still holds over $2 billion in the stablecoin. This incident has raised eyebrows because of its possible ties to North Korea. Many speculate that hackers linked to the Democratic People’s Republic of Korea (DPRK) might be involved.
Observers have noted that North Korean hacker addresses have racked up losses of over $700,000 while trading on HyperLiquid. Unfortunately, this is not the first time these groups have been linked to suspicious activities within the crypto space. They are a group notorious for targeting crypto platforms.
In a recent X post, Security analyst Tay revealed the modus operandi of North Korea’s cyber operations. He stated that the DPRK focuses more on testing systems for a potential larger-scale attack than trading for profit. This means the hackers carefully studies their victims before carrying out attacks.
Technical failures have plagued the platform, leading to bad user experiences and declining transaction volume. These issues, including exploitable smart contracts, have harmed the platform’s reputation.
This is despite HyperLiquid’s promises of improving the platform’s security. Additionally, HyperLiquid’s governance is under scrutiny for lacking transparency. This has dwindled some investors’ interest.
Many users call for reforms to ensure more equitable decision-making in the decentralized finance space.
Nevertheless, HyperLiquid’s platform has seen remarkable success recently. As one of the largest on-chain perpetual exchanges, it commands over 50% of the market share. This year, the Layer 1 blockchain shattered trading volume records, reaching $500 billion and surpassing Ethereum.
The platform has attracted significant attention, particularly after launching its HYPE token in late November. Since then, the token’s value has surged by more than 600%, reaching a market capitalization of $10 billion at its peak.
However, this success also puts the platform in the crosshairs of malicious actors who may see it as a high-value target. Tay warned that DPRK hackers are highly skilled and persistent. They often unpatched vulnerabilities known as zero-day exploits to attack.
As HyperLiquid navigates this challenging situation, its ability to safeguard its users and assets will be under intense scrutiny. Despite the massive outflow of USDC and hacker activity, the platform remains a major protocol in the Decentralized Finance (DeFi) space.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
