Hyperliquid has responded to community allegations of insider trading after confirming that a wallet accused of shorting its native HYPE token belonged to a former employee who was dismissed earlier this year. The decentralised perpetuals exchange said the individual has had no connection with the firm since early 2024 and that their actions were not representative of the company’s standards.
Wallet flagged by community
The issue surfaced after members of the Hyperliquid community raised concerns about a wallet that appeared to be selling large amounts of HYPE. The address was accused of shorting the token during a period of market volatility, triggering speculation that it could be linked to the internal team.
Community member cobe.hype had previously alleged that the wallet was associated with Hyperliquid insiders and claimed that around 4,000 HYPE tokens worth roughly 134,000 dollars were sold in a single day in November.
Co founder issues clarification
In a message posted on Hyperliquid’s Discord channel on Monday, co founder Iliensinc stated that the wallet belonged to a former employee who was terminated in the first quarter of 2024. He emphasised that the individual no longer has any affiliation with Hyperliquid Labs.
“This individual is no longer associated with Hyperliquid Labs, and their actions do not reflect our team’s standards or values,” Iliensinc wrote, referring to the wallet address flagged by the community.
The clarification was intended to reassure users following weeks of speculation around possible insider activity linked to the HYPE token.
Strict trading rules for staff
Iliensinc reiterated that Hyperliquid enforces strict internal trading policies to maintain transparency and trust. According to the co founder, all employees and contractors are subject to clear ethical rules governing their interaction with the HYPE token.
Hyperliquid explicitly bans staff from participating in derivatives trading involving HYPE, whether taking long or short positions. Iliensinc also stressed that trading based on material non public information is fundamentally prohibited and that sharing such information with third parties is equally restricted.
He added that these measures are designed to ensure a level of accountability that the company believes should serve as a benchmark for the wider crypto industry.
Market position remains strong
Despite the controversy, Hyperliquid continues to hold a dominant position in the decentralised perpetuals market. Founded in late 2022, the platform has rapidly grown into a major player within the sector.
According to CoinGecko data, Hyperliquid processed at least 653 billion dollars in trading volume during the second quarter of 2025. This figure represents approximately 73 percent of the entire perpetuals DEX market, underlining the platform’s scale and influence.
HYPE volatility and long term outlook
The HYPE token has experienced significant price swings since its launch. Arthur Hayes, co founder of BitMEX, recently described Hyperliquid as the best story of the current crypto cycle. He noted that HYPE debuted at around two to three dollars in November 2024 before surging to nearly 60 dollars.
In 2025, the token reached an all time high close to 60 dollars in mid September before undergoing several sell offs. At the time of publication, HYPE was trading at approximately 25.40 dollars. This places it about 24 percent lower over the past year while still showing a gain of around 290 percent since launch, according to CoinGecko.
