Exchange Cites Maintenance Following Suspicious Trading
Hyperliquid, the decentralized perpetuals exchange built around the HYPE token, halted deposits and withdrawals on Wednesday morning after what appeared to be a manipulation attempt involving the POPCAT memecoin. The pause was first flagged at around 11:22 a.m. ET, with a notice on the platform describing the action as “maintenance.” An ArbiScan transaction later confirmed that both deposit and withdrawal functions were temporarily suspended. The halt followed a surge of onchain speculation that a single trader attempted to move POPCAT’s price through coordinated long positions. The memecoin dropped 6.8% in 24 hours, while HYPE, Hyperliquid’s native token, slipped nearly 2% during the same period.
Investor Takeaway
The incident highlights persistent vulnerabilities in onchain derivatives platforms, where concentrated trades can still trigger losses for liquidity providers despite risk controls.
Analyst Points to Coordinated POPCAT Longs
An onchain researcher known as MLMabc posted an analysis on X claiming the disruption began after a trader withdrew $3 million in USDC from OKX, spread the funds across 19 wallets, and began opening large POPCAT longs on Hyperliquid. “Around 14:45 CET, he started longing millions worth of POPCAT, placing roughly $20 million of buy orders at $0.21,” the analyst wrote. “The combined long position grew to about $30 million across those wallets.” According to MLMabc, the trader’s position collapsed when a large buy wall was removed, triggering a wave of liquidations. The losses reportedly spilled over to Hyperliquid’s community-owned liquidity vault, known as the Hyperliquidity Provider (HLP). “POPCAT then dumped further, resulting in a $4.9 million loss for HLP. Hyperliquid later manually closed the position,” the analyst said. They added that the trader appeared to be “trying to mess with” the platform and that the issue was expected to be resolved quickly. Hyperliquid has not yet issued an official explanation beyond the maintenance notice.
Past Incidents and Ongoing Risks
It is not the first time Hyperliquid has been hit by a trading anomaly. In March, a similar manipulation event involving the Solana-based memecoin JELLYJELLY led to about $12 million in unrealized losses for the same HLP vault. That case also stemmed from leveraged short positions that backfired after a sharp price move. Analysts said Wednesday’s pause shows that even as decentralized derivatives exchanges grow in sophistication, they remain exposed to liquidity stress when facing coordinated trades. Hyperliquid has grown rapidly this year, becoming one of the largest onchain venues for perpetual contracts by trading volume, but incidents like this raise questions about how decentralized risk systems handle extreme events.
Investor Takeaway
Hyperliquid’s handling of the POPCAT liquidation will be closely watched by traders and liquidity providers assessing the stability of decentralized perpetuals markets.
Market Reaction
Hyperliquid’s founders have previously said the exchange’s design aims to balance openness with safety through community-governed risk parameters. However, large leveraged positions remain difficult to contain when price discovery happens entirely onchain. At press time, POPCAT was trading around $0.19, down more than 30% from levels seen earlier in the week, according to CoinGecko data. Hyperliquid had not yet announced when deposits and withdrawals would resume.