A coordinated group of whales, suspected of being backed by major cryptocurrency exchanges, manipulated the price of the $JELLY token, resulting in substantial losses for Liquid Providers on Hyperliquid.
Hyperliquid Incurred Significant Exposure Due to the Whales’ Actions
According to Lookonchain, this trader executed a large short position on Hyperliquid while simultaneously acquiring JELLY tokens externally. Subsequently, the trader removed their margin, causing Hyperliquid’s HLP to take over the $4.5 million loss on the short position. At one point, this large short position exposed HLP to losses exceeding $6 million.
At the same time, another wallet address opened a Long order on it and at one point owned a PnL of up to 12 million USD.
Source: Hyperliquid
Following this, the whales proceeded to repurchase JELLY, driving the losses on the previously held short position to over $12 million.
A massive whale with 124.6M $JELLY($4.85M) is manipulating the price of $JELLY(jellyjelly) to make Hyperliquidity Provider (HLP) face a loss of $12M!
He first dumped $JELLY, crashing the price and leaving HLP with a passive short position of 398M $JELLY($15.3M).
Then he bought… pic.twitter.com/kYcKshV4rl
— Lookonchain (@lookonchain) March 26, 2025
Things aren’t quite as simple as they seem
According to on-chain investigator ZachXBT, the situation extends beyond initial observations. The two addresses involved in the JELLY price manipulation, 0x20e8 & 0x67f, exhibit connections to centralized exchanges such as OKX, MEXC, Bybit, and Binance. Both addresses demonstrate interactions and have received funding from these exchanges.
The suspicion that these exchanges may have “malicious intent” against Hyperliquid is further substantiated by the immediate announcements from OKX and Binance, listing Perpetual Pairs for the JELLY memecoin.
Learn more: Binance will List JELLYJELLY and MAVIA on Perpetual Market
The price of HYPE reacted erratically
Following the whale’s price manipulation of the token, the price HYPE experienced a sharp decline. However, fortunately, Hyperliquid promptly delisted JELLY and closed the JELLY short position, thus avoiding any losses.
This action contributed to a 25% surge in the price of HYPE.
HYPE price jump sharply after the delist announcement – Source: CoinGecko
Conclusion
This incident appears to signal a declaration of hostility by centralized exchanges (CEXs) against Hyperliquid, a decentralized exchange (DEX). Amidst Hyperliquid’s growing market share, this maneuver underscores the necessity for this Layer 1 DEX project to implement substantial enhancements to effectively counter major market competitors.
