JELLYJELLY Madness: A $12M Heist Turned Profit? 🤯

by

In the great, swirling maelstrom of crypto madness, Hyperliquid, a decentralized exchange not entirely unlike a digital bazaar, found itself in a bit of a pickle. Suddenly, JELLYJELLY, a meme coin with as much substance as its name suggests, leapt up by500%. Someone, somewhere, was pulling strings like a puppeteer at a crypto carnival, risking a $12 million loss. But fear not! Hyperliquid’s team, much like a troupe of digital wizards, swooped in, fixed the chaos, and turned impending doom into a $700K profit. JELLYJELLY trading? Shut down faster than a pub at closing time.

The Whale That Nearly Ate the Market

It all began with a trader, hoarding124.6 million JELLYJELLY tokens, worth a cool $4.5 million, placing an $8 million bet against Hyperliquid. This forced the platform’s liquidity vault into a precarious dance with fate. But here’s the twist: another wallet, likely operated by the same trader (because why have one when you can have two?), went long. The result? JELLYJELLY’s price went up faster than a rocket, triggering mass liquidations and filling the trader’s pockets. Arkham, in a reveal worthy of a detective novel, pointed out this was a clever (or sneaky) strategy to exploit leverage and drain Hyperliquid’s coffers.

Hyperliquid just got exploited. What happened?

A trader deposited $7.167M on3 separate Hyperliquid accounts within5 minutes of each other. He then made leveraged trades on an illiquid coin, JELLYJELLY.

However, he ended up losing money, and is down almost $1M unless…

— Arkham (@arkham) March26,2025

But, as they say, the best-laid plans of mice and men often go awry. The trader’s accounts were slapped with a restrict-to-reduce-only order, meaning they could no longer open new trades and had to sell off tokens like a desperate market vendor at the end of the day, despite having millions in unrealized gains.

The attacker’s last withdrawal was at12:43 UTC. However, he continued to attempt withdrawals – but was unable to, since his account was restricted to reduce-only orders at12:50 UTC.

However, his accounts still had millions of dollars in unrealized PnL.

Instead of withdrawing,…

— Arkham (@arkham) March26,2025

As JELLYJELLY’s price continued its ascent, the liquidity vault at Hyperliquid faced the abyss. Major exchanges, smelling opportunity in the chaos, listed perpetual futures for JELLYJELLY. It was like watching a magic trick where the rabbit multiplies.

Hyperliquid Hits the Big Red Button

With the situation veering towards catastrophe, Hyperliquid validators, in a move reminiscent of a superhero team, reset JELLYJELLY’s price to $0.0095—ground zero of the whale’s original short position. This allowed them to liquidate392 million JELLYJELLY tokens, turning a potential disaster into a neat $703K profit. And just like that, they closed all JELLYJELLY positions and banished the token from their platform, promising to reimburse users (except for those suspected of being part of the scheme, of course).

A Dent in Hyperliquid’s Armor?

The aftermath was, predictably, a mixed bag of reactions. Some hailed Hyperliquid’s swift action, while others, like Bitget CEO Gracy Chen, pointed fingers, accusing it of acting more like a traditional exchange. Even BitMEX co-founder Arthur Hayes raised an eyebrow. This was, after all, Hyperliquid’s second major liquidity scare in a fortnight, following a whale-induced Ethereum long liquidation that caused a $4 million loss. The result? Hyperliquid’s native token, HYPE, took a tumble, dropping over12% in a day and over30% for the month. Ouch.

Stay Tuned for More Crypto Shenanigans!

Keep your finger on the pulse with the latest in Bitcoin, altcoins, DeFi, NFTs, and more. Because in the world of crypto, you never know what’s around the corner. 🚀🎢

Read More

2025-03-27 08:24