Trader Tries to Hack Hyperliquid with JELLY, Ends Up Wrecked with $1M Loss
A trader who thought they had found the perfect loophole in Hyperliquid just got rekt—losing almost $1 million in the process.
According to Arkham Intelligence, this person set up three accounts super fast, planning to abuse the exchange’s liquidation mechanics. They placed massive long and short trades, trying to force a payout before they could react.
But here’s where it went sideways—JELLY’s price shot up by 400%, instantly nuking their $4 million short. The trade was so big that it got dumped into Hyperliquid’s liquidity provider vault (HLP). While trying to escape, the trader withdrew funds from their other accounts to protect their winnings.
It wasn’t having it. They locked down the accounts, switched them to reduce-only mode, and then froze and delisted JELLY. The result? Their first two accounts lost all the paper profits, and they’re stuck with a potential $1M hole.
Arkham says they still managed to pull out $6.26M, but at least $1M is stuck. If they can grab it later, they’re only down $4K. Otherwise, it’s a full-blown disaster.
This isn’t even the first time something like this happened. Earlier this month, a whale torched a $200M ETH position, making Hyperliquid’s HLP eat a $4M loss. Looks like traders are testing the limits of leveraged positions, but Hyperliquid is clapping back hard.
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