Hyperliquid TVL and Token Price June 2025\u200a\u2014\u200aSource: DefiLlamaIts success is driven by a custom Layer 1 blockchain enabling ultra-fast, gasless trading; a CEX-like user experience for perpetual futures; a non-KYC, don\u2019t-care-about-AML attitude; and an extremely successful HYPE\u00a0airdrop.<\/em><\/p>\n It has established itself as a cornerstone within the traditionally CEX-dominated crypto derivatives market, especially for perpetual Bitcoin swaps, according to recently published figure by Velo\u00a0Data.<\/p>\n Source: Bloomberg<\/a><\/p>\n A few months ago, security researcher Taylor Monahan revealed that despite the hype and the perception that Hyperliquid was becoming \u201cToo Big To Fail,\u201d the platform was actually built on shaky security foundations, with its validator system highly centralized, with no multisig or decentralized safeguards.<\/p>\n While its founders showed a rather cavalier attitude toward security concerns, even as North Korean threat groups began circling it like\u00a0sharks.<\/p>\n Source: Taylor Monahan\u2019s Twitter<\/p>\n Some, trying to deflect the very alarming nature of Monahan\u2019s findings, suggested that DPRK hackers were only \u201ctrading\u201d on HyperLiquid\u200a\u2014\u200abut to quote Monahan: \u201cY\u2019all, DPRK doesn\u2019t trade. DPRK\u00a0tests.\u201d<\/em><\/p>\n Well, since December 2024, much has changed. There were multiple hints over the past few months that HyperLiquid was being used as a money laundering tool\u200a\u2014\u200abut these remained unproven until just a few days ago, when news broke that Chinese police had cracked down on three cases of crypto money laundering involving HyperLiquid since March\u00a02025.<\/p>\n So it\u2019s not far-fetched to imagine that, rather than merely trading, the DPRK-linked threat groups behind the movements Monahan spotted in December may have been testing the waters\u200a\u2014\u200aand perhaps finding success in laundering funds.<\/p>\n As of now, this connection remains speculative\u200a\u2014\u200abut the active use of HyperLiquid for money laundering no longer\u00a0is.<\/p>\n So let\u2019s break down how launderers are able to leverage HyperLiquid to turn their tainted funds whiter than\u00a0white.<\/p>\n The first rather convincing demonstration on how HyperLiquid could become an effective laundering tool in the hands of criminally driven individuals comes from PixOnChain<\/a>, a kind of crypto Twitter influencer who focuses on trending on-chain activity.<\/p>\n In March 2025, they revealed what they identified as a money laundering pattern on HyperLiquid.<\/p>\n The strategy they describe is simple, effective, and involves manageable risk\u200a\u2014\u200amaking it attractive to individuals desperate to turn tainted funds into seemingly legitimate ones they can easily cash\u00a0out.<\/p>\n To summarize, they structure their laundering trades so that the dirty money gets wiped out while the clean positions profit.<\/p>\n How do they achieve\u00a0this?<\/p>\n Returning to the example provided by PixOnChain, it\u2019s a two-step strategy.<\/p>\n The launderer first goes to no-KYC, no-scrutiny HyperLiquid, which allows extremely high leverage\u200a\u2014\u200a50x.<\/p>\n They deposit $5 million in tainted funds and, with 50x leverage, open a short position worth $250\u00a0million.<\/p>\n With the \u201cdirty short\u201d secured, step two takes\u00a0place.<\/p>\n Now, they move to a CEX and open $250 million in long positions funded by clean\u200a\u2014\u200aor cleaned\u200a\u2014\u200afunds.<\/p>\n While this may look like perfect hedging with a net market exposure close to zero, it\u2019s actually rigged: the dirty funds tied to the short positions are meant to be liquidated, while the clean funds on the CEX are meant to capture the legitimate profits on the long\u00a0side.<\/p>\n TL;DR: <\/em><\/strong>The goal is to make sure the losses occur on the dirty side, wiping out tainted funds, while the profits accrue in a clean\u00a0account.<\/em><\/p>\n To guarantee this, they choose very high leverage so that even a small, 2% price increase in the shorted asset will fully liquidate the $5 million margin\u200a\u2014\u200asomething that can happen regularly with volatile\u00a0assets.<\/p>\n This outcome becomes even more certain if they can anticipate upward price movements\u200a\u2014\u200awhether from upcoming news, announcements, or by manipulating less liquid cryptocurrency spot markets as part of a more sophisticated laundering scheme.<\/p>\n PixOnChain highlights that liquidation is even more likely because traders shorting against funding fees face rising costs and may rush to close positions, causing prices to spike further and triggering a short\u00a0squeeze.<\/p>\n Now, as anticipated, the price goes up, the \u201cdirty short\u201d is liquidated, and the tainted $5 million in funds vanish forever; meanwhile, the long position on another exchange gains 2% on $250 million, generating $5 million in legitimate, clean\u00a0profit.<\/p>\n The money laundering trick is done, and our criminal can walk away with $5 million in untainted funds.<\/p>\n Source: PixOnChain\u2019s Twitter<\/a><\/p>\n Not long after posting their breakdown of the money laundering scheme potentially happening on HyperLiquid, PixOnChain jokingly bantered about the impressive bookmarking ratio on their post, jokingly threatening to call the FBI on\u00a0them.<\/p>\n In retrospect this may have been a good\u00a0idea!<\/p>\n This is just bantering speculation, but it must be noted that the money laundering cases on which Chinese police worked on date back to March, when this twitter demonstration took place, make of that what you\u00a0will!<\/p>\n Source: PixOnChain\u2019s Twitter<\/a><\/p>\n We will never know if those cases were the eggs or the chickens, or none of them, but one thing is for sure, the criminals involved in those cases followed this laundry detergent recipe to the\u00a0T.<\/p>\n To quote\u00a0CCN<\/a>:<\/p>\n \u201cChinese traders completed fund laundering by allegedly using Hyperliquid\u2019s high-leverage liquidation mechanism to wash out the illicit gains. They did this by creating liquidation losses on the platform and reversing positions on centralized exchanges to earn\u00a0money.\u201d<\/em><\/p>\n Apparently, this strategy might soon earn a name: \u201cThe James Wynn Strategy,\u201d after Mirror Tang, founder of blockchain security firm Salus, drew a sharp comparison between the laundering method and the latest shenanigans of a certain James\u00a0Wynn.<\/p>\n Wynn rose to (in)fame on Crypto Twitter after several massive high-leverage positions\u200a\u2014\u200asome as large as a billion dollars\u200a\u2014\u200awere liquidated on HyperLiquid, making headlines across multiple crypto news\u00a0outlets.<\/p>\n What\u2019s most intriguing about this name-coining is that it might be closer to the real money laundering MO than anyone expected.<\/p>\n According to dethective<\/a>, a crypto sleuth who specializes in unearthing shady coins and exposing \u201cKOLs dumping on you,\u201d James Wynn isn\u2019t the crazy gambler he appears to be\u200a\u2014\u200ait\u2019s a persona he\u2019s built for clout and massive follower\u00a0gains.<\/p>\n His investment strategy, while a bit risky, is actually just plain old hedging, just with oversized numbers, because he has deep pockets that allow for eye-catching leverage and dramatic unrealized PnL\u00a0swings.<\/p>\n Source: Dethective\u2019s Twitter<\/a><\/p>\n In short, James Wynn is actually far from being \u201cCrypto\u2019s Most Reckless\u00a0Trader.\u201d<\/p>\n In March 2025, a $5.2 million trading pattern on Hyperliquid, beyond the James Wynn strategy, raised suspicions of money laundering. The wallet involved had a suspicious trading history and seemed to be directly linked to crypto phishing schemes. The owner of this wallet deposited $5.22 million into Hyperliquid and opened two high-leverage positions: an ETH long at 50x leverage and a BTC long at 20x leverage.<\/p>\n The trader achieved a \u201c100% win rate\u201d on two swiftly executed ETH trades, closed manually and perfectly timed, netting a $2.2 million profit in two\u00a0days.<\/p>\n One might argue it\u2019s merely a criminal playing around on Hyperliquid\u200a\u2014\u200aand that could indeed be\u00a0true.<\/p>\n The money laundering aspect of this scheme intervenes after profits are made. Hyperliquid, with no KYC requirements, allows users to input a withdrawal wallet different from the one used to open positions on the platform.<\/p>\n This means the profits are \u201cclean,\u201d as the withdrawn funds are sent to an address not directly linked to the original illicit\u00a0wallet.<\/p>\n On-chain, there appears to be no connection between the tainted wallet and the new withdrawal wallet. The \u201cdirty\u201d link is concealed within Hyperliquid\u2019s internal state, and unless Hyperliquid exposes their users, there\u2019s no reason to ever connect them\u200a\u2014\u200aunless the launderer mistakenly reconnects them\u00a0later.<\/p>\n Thus, a criminal using Hyperliquid can both profit and conceal the illicit nature of the realized gains, effectively obfuscating their funds. Given the risky nature of this obfuscation method, the individual who chose it may have faced challenges cashing out through traditional avenues, especially if blacklisted; thus, gambling or high-leverage trading becomes a worthwhile risk.<\/p>\n This move could become increasingly common in the near future, as efficiently cashing out illicit funds has become exceedingly difficult for crypto criminals\u200a\u2014\u200aa topic we discussed at length in our <\/em><\/strong>Crypto Criminal Report of 2024 and our report on the eXch-Bybit money laundering saga.<\/p>\n The 2024 Crypto Crime Report<\/a>eXch.cx, Crypto Money Laundering and the Bybit Hack<\/a><\/p>\n The involvement of HyperLiquid in criminal activities has some of their users worried about a regulatory crackdown.<\/p>\n While the U.S. has been the proactive force shaping the biggest crypto players into law-abiding, KYC- and AML-compliant citizens over the past few years\u200a\u2014\u200aback when crypto in 2020 was still basically the far west\u200a\u2014\u200athat era is\u00a0over.<\/p>\n A regulatory smackdown ending in massive sanctions and forced internal political change at privacy-focused platforms feels like a distant threat\u200a\u2014\u200aat least for\u00a0now.<\/p>\n In today\u2019s regulatory paradigm, with no real incentives or credible threats, there\u2019s no reason to believe HyperLiquid will take any meaningful action to stop the misuse of their platform for money laundering.<\/p>\n So, HyperLiquid, as it stands, has the potential to become a key money-laundering stop on the obfuscation routes of crypto criminals.<\/em><\/strong><\/p>\n Nefture<\/em><\/a> is a <\/em>Web3 real-time security and risk prevention platform<\/em><\/strong> that detects on-chain vulnerabilities and protects digital assets, protocols and asset managers from significant losses or\u00a0threats.<\/em>Nefture core services includes <\/em>Real-Time Transaction Security<\/em><\/strong> and a <\/em>Threat Monitoring Platform<\/em><\/strong> that provides accurate exploits detections and fully customized alerts covering hundreds of risk types with a clear expertise in\u00a0DeFi.<\/em>Today, Nefture proudly collaborates with leading projects and asset managers, providing them with unparalleled security solutions.<\/em>Book a demo<\/em><\/strong><\/a>\u00a0<\/em><\/strong>\ud83e\udd1d<\/em><\/p>\n HyperLiquid: A New Route for Crypto Money Laundering?<\/a> was originally published in Coinmonks<\/a> on Medium, where people are continuing the conversation by highlighting and responding to this story.<\/p>","protected":false},"excerpt":{"rendered":" Hyperliquid has seen a meteoric rise since its 2023 launch, reaching over $2.1 billion in TVL, with its native token HYPE hitting a new all-time high of $44.79 and positioning itself to break into the top 10 cryptocurrencies by market capitalization. Hyperliquid TVL and Token Price June 2025\u200a\u2014\u200aSource: DefiLlamaIts success is driven by a custom […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-75842","post","type-post","status-publish","format-standard","hentry","category-interesting"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/75842"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=75842"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/75842\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=75842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=75842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=75842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}First Step<\/h4>\n
Second Step<\/h4>\n
The James Wynn\u00a0Strategy<\/h4>\n
Another Money Laundering Scenario: Betting on Long and\u00a0Praying<\/h4>\n
Unlike the previously used fake hedging strategy, this approach is even simpler and much riskier\u200a\u2014\u200asimply trading, longing with high leverage, and hoping the bet will pay\u00a0off.<\/p>\n
In this case, with just two brief trades on Hyperliquid, the criminal managed to recoup nearly 43% in clean, shiny coins from their tainted holdings.<\/p>\nAbout us<\/h3>\n