TLDR
- HYPE token saw its value plummet by 21% as the Hyperliquid platform faced reports of hacker activity potentially linked to North Korea.
- Taylor Monahan, a security authority, noted suspicious movements in a wallet's activity, implying that North Korean cybercriminals might be exploring vulnerabilities.
- In November 2024, Hyperliquid executed an extensive $1.6 billion token release, propelling its market value to a towering $11 billion.
- The platform's reliance on only four validators is raising red flags among cybersecurity specialists.
- $211 million worth of USDC was hurriedly pulled out from the platform by users concerned about security.
Alarm spread across the crypto world as experts signaled potential North Korean hacking efforts targeting the trading platform Hyperliquid, resulting in a steep 21% fall in its HYPE token and triggering a massive withdrawal of user funds.
The saga unfolded with Taylor Monahan, renowned for tracking North Korean crypto maneuvers, flagging a loss of about $500,000 in trading linked to a wallet associated with North Korean hackers on Hyperliquid. Monahan postulated this as a test of Hyperliquid's defenses.
The DPRK's ventures into crypto seem to be facing hurdles...š
Honestly, if I were responsible for Hyperliquid's four validators (or those makeshift binaries on GitHub), I'd be seriously worried.
Despite the turmoil, the folks at Hyperliquid appear unfazed, giving a sense that all is well. š« pic.twitter.com/JrrU7t1sJe
ā Tay š (@tayvano_) December 22, 2024
Hyperliquid, which rolled out its HYPE token through a massive $1.6 billion airdrop late in 2024, has quickly become a frontrunner in the realm of decentralized finance. It operates its own speedy blockchain on the Arbitrum network, an advanced layer-2 tech on Ethereum.
Hyperliquid has seen spectacular success, with its native token HYPE boasting a market worth over $11 billion over the weekend. However, such triumph might have drawn the gaze of state-backed hacking entities.
HYPE Price
Experts in cybersecurity have flagged potential risks within Hyperliquid's framework. The platform relies on a mere four validators to uphold network security and transaction processing. Concerns deepen at the thought that these machines could be multitasking with casual activities.
Monahan warned that this arrangement makes the platform especially prone to social engineering attacks. A single compromised system could grant intruders control over the entire network and the immense user funds it holds.
The market's response to these alarm bells was immediate. The price of HYPE dramatically fell to $26.50, marking a 21% loss. Perhaps more telling was the withdrawal of $211 million in USDC, the largest single-day outflow in Hyperliquid's history.
In an address via Discord, Hyperliquid Labs assured the public that no exploit, including one from North Korea, occurred on its platform, and user funds were secure. Yet, the statement hasn't fully dispelled market anxiety.
The scenario has caught the attention of other experts in the field. Nassim Eddequiouaq, with a history of counteracting crypto threats, voiced worries about North Korean hacker involvement in Hyperliquid.
I directly worked on the major Ronin bridge hack and pursued off-chain BSC bridge hackers, while also being part of Apple's security team during the Pegasus spyware sagaāconsider me somewhat of an authority on this matter.
I'd recommend the @HyperliquidX team to do theā¦ https://t.co/y0aqUAqWJb
ā Nass Eddequiouaq (@nassyweazy) December 23, 2024
The gravity of these concerns grows given North Korea's notorious record in crypto heists. In 2024, North Korean hacker groups are estimated to have commandeered $1.3 billion through crypto, nearly two-thirds of that year's total stolen sum.
Emerging as a hybrid solution, Hyperliquid marries elements of both centralized and decentralized exchanges. Despite its blockchain transparency, the platform opts for a select set of validators to boost transaction speeds, potentially compromising some decentralized benefits.
Prior to the concerns, Hyperliquid was experiencing robust trading activity, averaging $8.8 billion daily over the past week, with a 24-hour peak of $15 billion on December 21.
The crypto community engages in debate, some defending the platform against what they see as unnecessary scare tactics. Nevertheless, many users are electing caution, reducing their stakes until there's further clarity.
Neither Hyperliquidās primary team nor Monahan have issued additional statements to the media. Monahan has expressed willingness to assess the platform's security at no charge, yet as of now, Hyperliquid hasn't taken him up on the offer.
