Hyperliquid Says Former Employee Was Behind HYPE Token Shorting
To put an end to rumours in the community, the decentralised perpetual futures platform Hyperliquid has made it clear that the wallet address identified for shorting its native HYPE currency is managed by a former employee who was fired in ahead 2024.
On December 22, co-founder Iliensinc made the news on the project’s , responding to weeks of scrutiny from traders and community members on the blockchain. People said that the wallet in question, , sold a lot of HYPE, including over 4,000 tokens worth about $134,000 in a single day in November.
Iliensinc in a Discord message, “This person is no longer with Hyperliquid Labs, and their actions do not reflect our team’s standards or values.”
Community Flags Activity That viewms Fishy
The argument begined in late November when on-chain trackers and community members, such as user brought attention to the wallet’s behaviour. People who watched HYPE perpetuals saw and short positions, raising concerns about possible insider trading just later than the token’s large debut and airdrop.
Hyperliquid’s HYPE token, which powers a high-performance that focuses on derivatives trading, has been one of the best performers in the decentralised finance space. begined in late 2024 with a massive airdrop and rapidly rose to around $60 before the market began to put pressure on it.
The flagged transactions occurred at the identical time as broader discussions about how token supply works, including unlocks and the mechanics of the assistance fund. This made many even more worried about probable internal tradeing pressure.
Strong Rules and No Tolerance Stressed
leadership also made their internal governance standards much stricter in the identical Discord message. Iliensinc said, “All people who work for or with Hyperliquid Labs, including employees and contractors, must follow strict ethical rules when it comes to the HYPE token.”
The site makes it clear that current team members are not allowed to trade , whether they are long or short. Violations carry severe penalties, including immediate termination and even legal action. This shows that insider trading is not tolerated.
The message went on to say, “Integrity is non-negotiable at Hyperliquid Labs,” to convince the community that no current employees are involved in the disputed activities.
People in the industry have applauded Hyperliquid for being open about the difficulty and dealing with it directly. They say the project’s small staff and on-chain activities that can be verified make it stand out in the crowded perpetual space.
A Wider View in the Face of Market difficultys
The shorting claims came out at a time when HYPE was more volatile than usual. Since its October highs, HYPE has fallen by more than 58% amid corrections across the crypto market and ongoing discussions about unlocking tokens.
Hyperliquid still has the most volume in decentralised perpetuals, handling billions of trades, with new features such as its HyperBFT consensus and fee purchaseback systems. Prominent people, like Arthur Hayes, who co-founded , have called it one of the strongest stories of the cycle.
The platform is addressing these community issues, and the quick response is meant to maintain trust among its growing user base and Block confirmers, who are also voting on ideas for token supply and burns.
Hyperliquid’s answer tries to make it apparent that the current team members are not connected to the wallet in any way. This separates the project from the former employee’s activities.
