A trader linked to unusual activity on the Hyperliquid exchange might have lost nearly $1 million, according to blockchain firm Arkham Intelligence.
The situation involves Jelly my Jelly (JELLY), a meme coin that was frozen and removed from the platform following the incident.
In a March 26 post on X, Arkham reported that the trader tried to take advantage of the system by opening three separate accounts within minutes. Two of them placed large buy positions worth $2.15 million and $1.9 million, while the third opened a $4.1 million sell position.
Did you know?
Subscribe – We publish new crypto explainer videos every week!
What Are Oracles in Crypto? (Beginner Friendly Animation)
JELLY’s price suddenly increased by over 400%, which triggered liquidation of the large short position. However, the system could not handle it immediately due to its size. The position was passed to the Hyperliquidity Provider Vault (HLP), which is responsible for managing large liquidations.
At the same time, the trader withdrew collateral from the other two accounts. Arkham noted that the trader had a “7-figure positive PnL to withdraw from” at that moment.
However, Hyperliquid later restricted the accounts to reduce-only mode. This means the trader could no longer open new positions and had to sell off holdings in one of the accounts to try to recover some of the funds.
Arkham says the trader has withdrawn around $6.26 million in total. However, at least $1 million remains stuck in the accounts.
Bitget
$1.94B
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
