Decentralized derivatives exchange Hyperliquid has temporarily suspended deposits and withdrawals following allegations of price manipulation involving meme coin POPCAT (POPCAT).
$30M manipulation on Hyperliquid ?
Roughly 13 hours before the event, an unknown trader withdrew $3M $USDC from OKX and split the funds across 19 wallets on Hyperliquid.
Then he started opening massive long positions on $POPCAT, pushing the total exposure to around $20–30M.… pic.twitter.com/FxnX7ap7Q8
— Hanzo ㊗️ (@DeFi_Hanzo) November 12, 2025
The exchange, which operates on the Arbitrum blockchain, described the suspension as “maintenance” on its official website. However, blockchain data analysis revealed that the halt occurred shortly after Hyperliquid’s liquidity provider vault (HLP) recorded a $4.9 million loss linked to the event.
How the POPCAT Price Manipulation Unfolded
According to blockchain investigators, the manipulation was executed by a single trader.
The trader withdrew $3 million in USDC from the centralized exchange OKX and distributed it across 19 wallets. Then, in a coordinated move, they placed simultaneous buy orders totaling around $20 million worth of POPCAT at $0.21 per token.
This artificial buying pressure caused the total open position value in POPCAT to swell to $30 million. But the trader abruptly canceled all buy orders, triggering a chain reaction of liquidations among other leveraged traders.
As liquidation cascades spread, Hyperliquid’s HLP vault absorbed a $4.9 million loss during the settlement process.
POPCAT’s Price Surge and Crash
POPCAT, a meme coin originally launched on Solana (SOL) in 2021, experienced extreme volatility during the event.
The token’s trading volume soared to $230 million, and its price briefly climbed to $0.20, before falling back to around $0.13 once the manipulation was revealed.
In response, Hyperliquid manually settled the affected positions , which is a rare intervention for a decentralized exchange that typically relies on automated, community-driven governance.
Following the event, Hyperliquid’s native token (HYPE) fell by about 2%.
Blockchain records confirm that an emergency lock mechanism was activated on Arbitrum, freezing all deposits and withdrawals. As of this writing, the exchange has not announced when services will resume.
Recurring Challenges in DeFi Risk Management
This is not the first time Hyperliquid has faced a market manipulation issue. In March 2025, a similar incident involving the Jelly-My-Jelly (JELLYJELLY) token resulted in $12 million in unrealized losses.
Analyst Steven Chen from The Block commented:
“While Hyperliquid continues to grow rapidly, these events highlight how decentralized exchanges still face weaker risk controls compared to centralized platforms.”
The case underscores the ongoing vulnerabilities in DeFi derivatives markets, where liquidity fragmentation and algorithmic liquidation systems can magnify single-actor manipulation risks.
