Update (Aug. 27 at 5:44 pm UTC): This article has been revised to indicate that a blockchain analyst has retracted a claim associating Justin Sun with a whale wallet.
Four whales, or major cryptocurrency investors, were accused of manipulating prices, causing a $4.59 million loss for an unfortunate trader and raising concerns about the reliability of decentralized trading platforms compared to their centralized counterparts.
The four whale wallets gained a combined total of $47.5 million after the recently launched Plasma blockchain’s (XPL) token surged by 200% to over $1.80 in just minutes on the decentralized exchange Hyperliquid.
The largest address, wallet 0xb9c, generated more than $15 million as the “main orchestrator,” according to blockchain data platform Spot On Chain in a Wednesday X post, which added:
“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 witnessed whales exploiting HLP vulnerabilities, manipulating coin prices, and sniping positions,” the post elaborated, urging the decentralized trading platform to address the allegations.
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The nearly $48 million profit was at the expense of several other traders, with one unfortunate trader facing a $4.5 million loss on an XPL position.
A second unfortunate trader, X user CBB, acknowledged a $2.5 million loss on his XPL short position, stating he is “never touching isolated markets” again.
The manipulation claims arose five months after Hyperliquid experienced a $6.26 million exploit involving the Jelly my Jelly (JELLY) memecoin due to a weakness in its liquidation parameters, as reported by Cointelegraph in March.
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Onchain analyst retracts claim linking Justin Sun to whale wallet
An onchain analyst initially suggested that Tron Network founder Justin Sun could be behind one of the whale wallets but later withdrew this claim, labeling it an erroneous 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 shared later,” pseudonymous analyst MLM stated on X.
The wallet in question initiated long positions on millions of XPL tokens on Hyperliquid, effectively ‘clearing the entire order book and liquidating everyone,’ according to MLM. After closing these positions, the whale reportedly made $16 million in “just one minute.”
$XPL pumped to $1.80, which is over 200% in 2 minutes.”
The address continues to operate a 1x leveraged XPL position valued at over $8.6 million, with an unrealized profit exceeding $614,000, as shown by Hypurrscan blockchain data.
Cointelegraph could not independently verify the ownership of the wallet address but has reached out to Justin Sun and Hyperliquid for comments.
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