- Hyperliquid was compromised by an illicit actor trying to trade the JELLY token.
- ZachXBT questioned the ecosystem’s decentralization policy after its JELLY delisting report.
As the week inches to an end, the crypto market prices have once again retreated to consolidation. Similar to previous days, regulatory advancements are failing to translate into cryptocurrency prices, causing frustration. Meanwhile, new tokens have continued to crop up, drawing attention from the community.
Notably, in January this year, a web3 developer launched a memecoin called JELLY. While it saw a significant response, an illicit trader used it to exploit Hyperliquid in the past day. According to Arkham Intelligence reports, he deposited $7.167M in three separate Hyperliquid accounts.
Following this he made leveraged coins on the illiquid JELLY token. However, he suffered a loss of $1M as Hyperliquid responded immediately and prevented withdrawals. Further, the past day saw them announcing that they plan to delist JELLY due to the illicit activities.
On this announcement, ZachXBT, the prominent private on-chain investigator raised questions of decentralization. He stated that Hyperliquid’s quick action observed in the past day was not similar to previous larger illicit actions in their ecosystem.
What is ZachXBT’s Opinion on Hyperliquid’s Decentralization Policy?
The on-chain investigator said that Hyperliquid seems to ‘draw the line’ at this point but failed to respond when DPRK had funds open from the Radiant Hack. He says that during a time when hundreds of victims faced losses, i.e., the aforementioned hack, Hyperliquid didn’t respond.
I have little interest in helping Hyperliquid if they have an incident after seeing how they choose to approach them
— ZachXBT (@zachxbt) March 26, 2025
When it’s Radiant hack with DPRK funds (thousands of victims) they claim they can’t do anything and were notified in a timely manner
When it’s a low cap PVP… pic.twitter.com/ms6fj7XGQY
They said they were helpless and couldn’t do anything. However, they seem to take strict actions for a small cap PVP memecoin. When asked how Hyperliquid should have responded, he said they should stay consistent and take action in all major incidents.
Otherwise, they should remain decentralized and take no actions at any time. He also further stated that they should create a mechanism that would discourage illicit actors from using the platform.
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