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Ex-Employee Identified as Wallet Behind HYPE Shorting Allegations
Hyperliquid has publicly addressed accusations that a community-flagged wallet was being used by an insider to short the HYPE token. The decentralized perpetuals exchange says the address in question, 0x7ae4…1028, belongs to a former staff member who was dismissed in early 2024 and is no longer affiliated with Hyperliquid Labs.
On the platform’s Discord, Hyperliquid co-founder Iliensinc clarified the matter after community user cobe.hype alleged that the address was "one of the Hyperliquid team wallets" and sold roughly 4,000 HYPE tokens (about $134,000) in a single day last November. Iliensinc emphasized that the individual’s activities do not represent the company’s standards.
Company policy on trading and insider information
Hyperliquid reiterated that employees and contractors are held to strict trading and ethical rules. The firm prohibits staff from participating in derivatives trading that involves HYPE — explicitly forbidding both short and long positions on the token for anyone within the organization. Additionally, trading on or sharing material non-public information is expressly prohibited.
According to the co-founder’s Discord statement, these internal rules are part of a broader compliance effort designed to set an industry benchmark for accountability among perp DEX teams and developers.
Community concerns and transparency
The clarification aims to restore trust among traders and liquidity providers who were alarmed by the apparent on-chain activity. Hyperliquid’s transparency in naming the wallet owner as a terminated employee seeks to draw a clear line between the platform’s governance and the individual’s actions.
Market position and HYPE token performance
Founded in late 2022, Hyperliquid has rapidly become a dominant player in perpetual decentralized exchanges. CoinGecko reports the platform processed at least $653 billion in trading volume during Q2 2025, representing roughly 73% of the perp DEX market — underscoring Hyperliquid’s influence in derivatives and perpetuals trading.
CoinGecko’s Q2 2025 industry report
HYPE’s volatility and market narrative
Notable crypto figure Arthur Hayes praised HYPE as the "best story" of the cycle, highlighting a dramatic price run after HYPE launched at around $2–$3 in November 2024 and surged toward $60 by mid-September 2025. The token has since experienced significant pullbacks: at publication HYPE traded near $25.40, down roughly 24% year-over-year but still up about 290% since launch.
Given Hyperliquid’s market share among perpetual exchanges and the token’s price swings, community vigilance on insider trading and derivatives behavior remains elevated. The exchange’s public statements and trading restrictions are intended to reduce the likelihood of conflicts of interest and preserve market integrity for traders of HYPE and other perpetual contracts.
For traders and observers, the episode is a reminder of the importance of clear internal policies and transparent communication when a platform commands a large share of on-chain derivatives volume.
Source: cointelegraph
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