Layer 1 Cryptocurrency Derivatives Platform Hyperliquid Sees Peak Outflows After Risk Reveal

Layer 1 cryptocurrency derivatives platform Hyperliquid has suffered a massive blow amid rising fears over the platform's security after a security expert revealed that hackers linked to North Korea (the Democratic People's Republic of Korea) had been using the Hyperliquid platform for at least a few months now.

After a security researcher revealed that hackers linked to North Korea (DPRK) have been using the Hyperliquid platform for months, the Layer 1 cryptocurrency derivatives platform has seen outflows peak.

Despite the news, HYPE, the platform's native token, continues to trade in the green, up nearly 4% in the last 24 hours. However, the daily chart shows that the crypto coin has been very volatile in the past day since news of the security concerns spread on social media.

Hyperliquid Outflows Hit Record Highs

Outflows on Hyperliquid reached an all-time high of $502.71 million on Monday, according to Dune Analytics, after Metamask security researcher Tay Monahan posted onchain data that appeared to show DPRK-linked hackers using the platform.

DPRK’s trading career is…uh….going…..🙈

tbh if i was the dude managing Hyperliquid's 4 validators (or those fucking ghetto ass binaries on gh) I would be shitting my pants right now

Hyperliquid dudes dont seem worried at all though so im sure its fine. 🫠 pic.twitter.com/JrrU7t1sJe

"Hyperliquid dudes don't seem worried at all though so I'm sure it's fine," Monahan said in a series of posts on X Monday. "DPRK doesn't trade. DPRK tests," she added, suggesting that accounts used by North Korea-linked hackers "test" the security of crypto platforms.

my offer from 2 weeks ago still stands @Hyperliquid

I'm still happy to do it async or via a call.

i can even give you one of my super nice happy colleagues if you dont like me.

but a massive amt of harm will come to people if you dont harden your ass asap. pic.twitter.com/OxLlB4lygE

Monahan also revealed that she had offered to discuss the matter with the Hyperliquid team two weeks ago. She said that her offer to provide security advice to the team still stands. "A massive amount of harm will come to people if you don't harden your a** asap," she added.

On its Discord channel, Hyperliquid said it was aware of reports regarding "activity by supposed DPRK addresses," but that there has been no exploit so far and "all user funds are accounted for."

can everyone calm the fuck down now

hyperliquid pic.twitter.com/0Dr2NFr5pN

It also said it had contacted "trusted parties" to confirm that the platform was following industry best practices, rather than "someone claiming to be a security party."

Some Crypto Users Still Concerned

Despite Hyperliquid's statement on the matter, there are still concerns that the platform may be too complacent. "A thief never says he is a thief," said one user, suggesting that Hyperliquid provided a "self-signed clearance certificate" about its platform's security instead of a legitimate clearance from a trusted blockchain security firm or solutions provider.

This is concerning. Every team should take this seriously. You cannot assume support from another team if it is uncertain.

Some prominent crypto players, such as PulseChain MPC wallet Pulse Wallet, have also expressed concern over the issue.

.@chameleon_jeff please meet with @tayvano_ , she and the team don’t mess around and have user’s best interest first. Take it from someone who had first-hand experience with North-Korea’s Lazarus Group. They are patient and very sophisticated.

Reach out to her. @tayvano_ is… https://t.co/000ePq000e

News of the presence of North Korea-linked exploiters comes months after prominent blockchain sleuth ZachXBT revealed how Lazarus Group, a notorious hacking group tied to the country, laundered some $200 million in stolen crypto during its three-year hacking spree across the crypto space.

Among the crypto security breaches that security experts have linked to Lazarus Group are the hackings of crypto exchange CoinMetro, which lost $750,000 in digital assets, and Canadian exchange CoinBerry, which had $370,000 in Bitcoin and Ethereum wiped out.

It remains to be seen how the news will further affect Hyperliquid and whether it will soon release official documentation on its work toward securing the platform.