Hyperliquid denies rumors of insider trading, special tools for privileged access

Hyperliquid denied rumors of insider trading, stating that the recently reported HYPE short position was opened by a former employee. The perpetual futures DEX has restrictions on team trading, especially for the native HYPE token. 

Hyperliquid came out with a statement on rumors of insider trading. The perpetual futures DEX announced that the disputed HYPE short position belonged to a former employee, as current team members are banned from trading the native token. Recently, HYPE price weakness has created worries on the exchange’s ability to survive during a slower crypto market period. 

HYPE still traded around $25 at the time of the announcement, close to the levels from the past few days. As of December 22, Hyperliquid whales are predominantly long, for 59% of positions. 

The leading HYPE position is short, with a notional value of $45M. The whale sits on unrealized gains of $86M, as HYPE shows continued price weakness. 

The whale positions on HYPE are much larger compared to the address that has been linked to insider trading. Hyperliquid identified the former employee, pointing to the wallet currently still shorting HYPE. 

Hyperliquid denies insider HYPE trading

The alleged insider position is valued at only $25,140, shorting 1,000 HYPE. At this size, the insider cannot have any significant effect on the market. The insider still owns around 2.5M HYPE from the spot market, holding despite the recent downturn. The short position is also earning minimal funding fees. 

Despite the single whale’s short position, most HYPE traders are bullish. Open interest for HYPE increased to $1.25B in the past day, with over 64% of positions going long. The only effect on Hyperliquid was the negative press from accusations of potential insider trading from current team members. 

Hyperliquid denies claims of insolvency

Alongside the rumors of an insider whale, Hyperliquid also issued a statement denying recent claims that the platform was insolvent. 

The USDC held on Hyperliquid relies on both Arbitrum and the Hyperchain, while some analysts only accounted for a part of the reserves. As a result, the exchange faced attempts at causing panic. 

“The Hyperliquid blockchain state is fully and verifiably solvent. The author excluded the HyperEVM USDC (a publicly announced and much anticipated integration), which exists in parallel to the Arbitrum bridge,” announced the Hyperliquid team. 

Additionally, Hyperliquid noted it launched some testnet features allowing aggressive trading, but that those features would not be brought to the mainnet or be available for live trading. The team also explained the exchange does not offer special trading privileges and cannot freeze the network on demand. 

The perpetual futures DEX also defended itself against claims of multiple backdoor technologies and claimed all its activity and trades are fully transparent and recorded on the blockchain. 

The market still carries around $4.15B in total value locked, with over $14B in daily trading volumes. The exchange achieved over $895M in fees for 2025, reflecting peak trading activity in both bull markets and downturns.

Sharpen your strategy with mentorship + daily ideas - 30 days free access to our trading program