Unexpected events have unfolded in the crypto market as a whale on the Hyperliquid platform made a strategic move that resulted in a $4 million loss. This incident has highlighted potential vulnerabilities in the platform’s risk management practices.
Incident Overview and Mechanics
The whale opened a long position worth $285 million, with collateral set at only $14 million. Over time, the collateral was withdrawn, raising the liquidation level from $1,800 to $1,930. Once the price surpassed this threshold, the position was automatically closed, and the loss was reflected in Hyperliquid’s liquidity pool.
Initially, there were speculations about possible insider interventions or attacks. However, the Hyperliquid team clarified the situation, dismissing these rumors.
“There was no protocol vulnerability or hacking incident.”
The statement noted that the whale’s withdrawal of collateral before realizing profits led to the liquidation.
