Update (Aug. 27 at 5:44 pm UTC): This article has been updated to reflect that a blockchain analyst retracted a claim linking Justin Sun to a whale wallet.
Four whales, or big cryptocurrency investors, were accused of price manipulation that resulted in a $4.59 million loss for one unfortunate trader, raising questions about the reliability of decentralized trading platforms over their centralized counterparts.
Four whale addresses profited a combined $47.5 million after the recently launched Plasma blockchain’s (XPL) token soared 200% to over $1.80 in minutes on the decentralized exchange Hyperliquid.
The largest of the four, wallet 0xb9c, profited more than $15 million as the “main orchestrator,” wrote blockchain data platform Spot On Chain in a Wednesday X post, adding:
“Whale manipulation on #Hyperliquid sent $XPL soaring 200% to $1.80 in minutes earlier today, marking one of the wildest short squeezes and wealth redistributions we've seen!”
“In just a few months, Hyperliquid has seen whales exploit HLP vulnerabilities, manipulate coin prices, and snipe positions,” added the post, urging the decentralized trading platform to respond to the allegation.
Related: Crypto whales buy $456M Ether in 'natural rotation' from Bitcoin
The near $48 million profit came at the expense of multiple other traders, with the most unfortunate suffering a $4.5 million loss on an XPL position.
A second unfortunate trader, X user CBB, admitted to losing $2.5 million on his XPL short position, adding that he is “never touching isolated markets” again.
The manipulation allegations come five months after Hyperliquid suffered a $6.26 million exploit involving the Jelly my Jelly (JELLY) memecoin due to a vulnerability in its liquidation parameters, Coinpectra reported in March.
Related: Crypto treasuries top $100B for Ethereum’s 10th anniversary: Finance Redefined
Onchain sleuth retracts claim linking Justin Sun to whale wallet
One onchain sleuth initially suggested Tron Network founder Justin Sun as a potential trader behind one of the whale wallets, but later retracted the claim, calling it an incorrect analysis.
“After confirming with multiple sources, I can confirm this is not Justin Sun. I apologize for the earlier incorrect analysis. Additional information will be released later,” pseudonymous analyst MLM said on X.
The wallet in question initiated long positions on millions of XPL tokens on Hyperliquid, ‘clearing the entire order book and liquidating everyone,’ MLM said Wednesday. After closing the positions, the whale made $16 million in "just one minute."
$XPL pumped to $1.80, which is over 200% in 2 minutes.”
The address is still running a 1x leveraged XPL position worth over $8.6 million, with an unrealized profit of over $614,000, Hypurrscan blockchain data shows.
Coinpectra was unable to independently verify the ownership of the wallet address, but has reached out to Justin Sun and Hyperliquid for comments.
Magazine: Altcoin season 2025 is almost here… but the rules have changed