Hyperliquid (HYPE) Trading Platform Under Scrutiny for Potential Money Laundering Activities

Multiple high-leverage trades on Bitcoin (BTC) and Ethereum (ETH) have raised suspicions of potential money laundering activities.

Crypto trading platform Hyperliquid (HYPE) is coming under scrutiny following reports by blockchain analytics firm Spotonchain ( स्पॉटऑनचेन ) of a series of large leveraged trades on Bitcoin (BTC) and Ethereum (ETH).

According to Spotonchain, a well-funded trader was recently seen depositing 5.22 million to open highly leveraged long positions on the Hyperliquid platform.

The trader placed an ETH long position at 50x leverage, entering at 1,884.4 and setting a liquidation point of 1,838.2. They also opened a BTC long position at 20x leverage, starting at 82,003.9 and setting a liquidation price of 61,182.

"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."

The consistent timing and magnitude of these trades have led to speculation that the activity is not part of a random market speculation strategy. Rather, it could be a sophisticated laundering operation or insider trading scheme.

One crypto analyst, AB Kuai Dong (艾比快到 ), raised the possibility 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. They could be attempting to launder illicit funds obtained through hacking.

Another analyst, Ai on X (艾 扫 X), chimed in, suggesting that these traders might not be insiders but expert gamblers using potentially stolen funds to execute high-risk trades.

According to Adolyb, who cited research by Coinbase’s Conor 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 engages 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.

These reports have once again brought to light the potential for high-leverage trading platforms to be used 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. As regulators and blockchain forensic firms increase their scrutiny of similar activities amidst mounting evidence linking Hyperliquid’s high-leverage trades to potentially illicit sources.

BeInCrypto's data shows that HYPE was down almost 8% since Wednesday’s session opened. As of this writing, HYPE was trading for 13.35.