Hyperliquid Says Ex-Employee Responsible for HYPE Token Shorting
- Hyperliquid addressed community concerns over suspected insider HYPE shorting
- The wallet in question belongs to a former employee dismissed in early 2024
- The ex-employee is no longer affiliated with Hyperliquid Labs
- Hyperliquid reiterated strict internal trading and ethics policies
- HYPE remains volatile but is still up sharply since launch
Decentralized perpetuals exchange Hyperliquid has clarified that a wallet accused by community members of insider trading activity does not belong to its current team, but to a former employee who was dismissed earlier this year.
In a statement shared on Hyperliquid’s Discord on Monday, co-founder Iliensinc said the wallet flagged for shorting large amounts of the HYPE token belonged to an individual terminated in the first quarter of 2024.
“This individual is no longer associated with Hyperliquid Labs, and their actions do not reflect our team’s standards or values,” Iliensinc wrote, referencing the address 0x7ae4…1028.
The clarification follows allegations raised by a community member known as cobe.hype, who claimed the wallet was linked to an internal team member. According to the claim, the address sold approximately 4,000 HYPE tokens — worth around $134,000 at the time — in a single day in November, sparking concerns about insider activity.
Strict Trading Rules for Employees and Contractors
In his Discord post, Iliensinc emphasized that Hyperliquid Labs enforces strict trading policies to ensure accountability and transparency across the organization.
“All individuals associated with Hyperliquid Labs, including employees and contractors, are bound by strict ethical standards regarding the HYPE token,” he said.
According to the co-founder, Hyperliquid explicitly prohibits employees and contractors from engaging in any derivatives trading involving HYPE, including both long and short positions. He added that trading based on material non-public information is “fundamentally prohibited,” and that this restriction also applies to sharing such information with third parties.
Hyperliquid framed these policies as part of its effort to set a higher standard for conduct within the decentralized exchange sector.
HYPE Volatility and Market Position
Founded in late 2022, Hyperliquid has grown into a dominant force in the decentralized perpetuals market. The platform processed approximately $653 billion in trading volume in the second quarter of 2025, accounting for roughly 73% of the perp DEX market, according to CoinGecko data.
Despite recent controversy and price volatility, HYPE continues to draw attention from prominent industry figures. BitMEX co-founder Arthur Hayes recently described Hyperliquid as the “best story” of the current crypto cycle, highlighting the token’s rapid
rise from an initial price of around $2–$3 at launch in November 2024 to highs near $60.
HYPE reached an all-time high close to $60 in mid-September before experiencing multiple sell-offs. At the time of publication, the token was trading around $25.40 — down roughly 24% over the past year but still up approximately 290% since launch, according to CoinGecko.
Final Thought
Hyperliquid’s response aims to draw a clear line between the actions of a former employee and the current team, while reinforcing its internal compliance standards. As scrutiny around token governance and insider activity intensifies across crypto markets, how projects communicate and enforce these rules may prove just as important as performance metrics.
