Crypto trading platform Hyperliquid (HYPE) is under scrutiny. Multiple high-leverage trades on Bitcoin (BTC) and Ethereum (ETH) have raised suspicions of potential money laundering activities.
Analysts have noted a pattern of unusually large and frequent leveraged trades executed with near-perfect timing. This led to questions about the funds’ source and the traders’ identities.
Spotonchain Flags High-Stakes Trades
Blockchain analytics platform Spotonchain reported a series of significant leveraged trades executed on the Hyperliquid platform. According to their analysis, a well-funded trader deposited $5.22 million onto the platform to open highly leveraged long positions in BTC and ETH.
The trader placed an ETH long position at 50x leverage, with an entry price of $1,884.4 and a liquidation point of $1,838.2. Additionally, they opened a BTC long position at 20x leverage, entering at $82,003.9 and setting a liquidation price of $61,182.
SpotOnChain further revealed that this trader had a history of executing short-term leveraged trades with a 100% win rate. The trader netted $2.2 million in profit in just two days.
“Notably, in the past 2 days, this whale closed two quick ETH long positions with a 100% win rate, netting $2.2 million in profit,” Spotonchain revealed.
The consistency of these trades has led to speculation that the activity is not random market speculation. Instead, it leans toward a sophisticated laundering operation or insider trading scheme.
AB Kuai Dong, a crypto market analyst, speculated that the funds used in these Hyperliquid trades could be linked to North Korean hackers. The analyst noted that North Korean cybercriminals have been known to test high-frequency trading strategies on crypto platforms as part of money laundering operations.
The analyst suggested they could be an attempt to clean illicit funds obtained through hacking. This assumption is based on the Hyperliquid trades’ anonymity and rapid execution.
“I am very curious about these large anonymous orders of Hyperliquid. Combined with the previous news about North Korean hackers testing Hyper trading, is it possible that these large and frequent 50-fold openings are all gray market funds laundering money?” the analyst posed.
Another analyst known as Ai on X supported this theory by pointing to previous research on high-leverage profits made on Hyperliquid. In early March, Ai reported that three addresses had generated $2.53 million in profit through GMX high-leverage trades.
Gambling or Insider Trading? Experts Weigh In
These addresses were linked to gambling platforms such as Roobet and AlphaPo. They had also interacted with ChangeNOW, an exchange favored by hackers. Ai speculated that the traders might not be insiders but expert gamblers using potentially stolen funds to execute high-risk trades.
“Insider or ultimate gambler? It is indeed more like the latter,” the analyst opined.
Crypto analyst Adolyb, who cited research from Coinbase’s Conor Grogan, provided further evidence of potential illicit activity.
“Coinbase people found out that it is a phishing address with 4 layers of jumps + gambling players,” Adolyb remarked.
According to Grogan, the crypto wallet responsible for some suspicious hyperliquid trades received funds from phishing attacks. He described the account as a “Roobet whale,” suggesting that the trader frequently engaged in high-stakes gambling on platforms historically associated with illicit fund flows.
Grogan noted that this individual had previously liquidated long positions just before a significant market event. According to the analyst, this indicates that their trades were not based on insider knowledge. Rather, stolen funds are used for gambling.
The reports have reignited concerns about the use of high-leverage trading platforms for illicit financial activities. While leverage allows traders to amplify their positions, it also allows criminals to move and disguise large sums of money rapidly.
The anonymity offered by decentralized and offshore exchanges further complicates efforts to track and regulate such transactions. Regulators and blockchain forensic firms will likely increase their scrutiny of similar activities. This is amidst mounting evidence linking Hyperliquid’s high-leverage trades to potentially illicit sources.
BeInCrypto data shows Hyperliquid’s token’s price is down almost 8% since Wednesday’s session opened. As of this writing, HYPE was trading for $13.35.
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