Hyperliquid blamed short trades on HYPE on actions of a former employee.
Date: 2025-12-23 Author: Henry Casey Categories: BUSINESS
The team of the decentralized exchange Hyperliquid responded to community criticism regarding possible insider trading in the HYPE token. The discussion centered on wallet details that some users believed belonged to a team member and was used to open short positions on the asset. The platform's representatives stated that these accusations are untrue.
Hyperliquid co-founder Iliensinc clarified that the address that raised suspicions is indeed linked to an individual who previously worked at Hyperliquid Labs. However, he stated that this employee was fired in the first quarter of 2024 and has had no connection with the project since then. He emphasized that any actions by this individual do not reflect the company's corporate principles, values, or policies.
The clarification followed posts by a community member nicknamed cobe.hype, who claimed that wallet 0x7ae4…1028 is associated with the Hyperliquid team. The user noted that in November 2025, approximately 4,000 HYPE tokens worth approximately $134,000 were sold from this address in a short period of time, with the transactions conducted through the TWAP mechanism.
Iliensinc noted that Hyperliquid Labs adheres to strict internal rules regarding the handling of the HYPE token. Specifically, all current employees and contractors are strictly prohibited from trading either the token itself or derivative financial instruments related to it. These restrictions apply to both long and short positions.
Furthermore, the co-founder emphasized that the company does not permit trading based on material, non-public information. Sharing insider information with third parties is also strictly prohibited. He stated that such measures are necessary to maintain user trust and ensure the platform's transparency.
Despite the controversy, interest in Hyperliquid remains high. BitMEX co-founder Arthur Hayes previously spoke positively about the project, calling it one of the most notable stories of the current cryptocurrency cycle. He noted the significant rise in HYPE's price—from a few dollars to around $60—and noted that the token's dynamics could indicate a transformation in the altcoin market and the emergence of new market trends.
However, the platform has already experienced negative incidents: it was previously reported that one of Hyperliquid's liquidity providers suffered losses of nearly $5 million as a result of manipulation of the POPCAT token. Amid these events, the team is striving to emphasize its commitment to ethical standards and distance itself from any suspicious activity.
