Decentralized perpetual futures exchange Hyperliquid has confirmed that a wallet address accused by the community of shorting its native token $HYPE belongs to a former employee who was terminated in the first quarter of 2024. The address, 0x7ae4…1028, was repeatedly flagged on social media platform X in late November and December, with users tracking on-chain movements around $HYPE distributions and sales shortly after the token's launch.
The community scrutiny intensified as trackers alleged the wallet sold approximately 1,200 $HYPE and continued offloading more through Time-Weighted Average Price (TWAP) selling. One widely shared estimate indicated a further 3,700 $HYPE were sold, worth about $110,000 at the time. This fueled a broader debate over whether post-launch selling pressure was originating from project insiders.
In a Discord announcement, Hyperliquid moved to contain the fallout, stating the individual is no longer associated with Hyperliquid Labs and that their actions do not reflect the team's standards or values. The exchange emphasized it enforces strict ethical standards, including a prohibition on team members trading $HYPE derivatives and a zero-tolerance policy on insider trading, with violations leading to immediate termination and potential legal action.
The situation escalated further as the shorting address was linked to a massive $735 million Bitcoin (BTC) short position and to Garrett Jin, the former CEO of the now-defunct exchange BitForex. Jin has denied ownership of the funds, claiming they belong to clients. This connection has raised significant concerns over insider trading, market integrity, and the adequacy of Hyperliquid's internal controls, casting a shadow over investor confidence in the platform.
