Crypto trading platform Hyperliquid (HYPE) is under scrutiny. Multiple high-leverage trades on Bitcoin (BTC) and Ethereum (ETH) have raised suspicions of potential money laundering activities.

Analysts have noted a pattern of unusually large and frequent leveraged trades executed with near-perfect timing. This led to questions about the funds’ source and the traders’ identities.

Spotonchain Flags High-Stakes Trades

Blockchain analytics platform Spotonchain reported a series of significant leveraged trades executed on the Hyperliquid platform. According to their analysis, a well-funded trader deposited $5.22 million onto the platform to open highly leveraged long positions in BTC and ETH.

The trader placed an ETH long position at 50x leverage, with an entry price of $1,884.4 and a liquidation point of $1,838.2. Additionally, they opened a BTC long position at 20x leverage, entering at $82,003.9 and setting a liquidation price of $61,182.

SpotOnChain further revealed that this trader had a history of executing short-term leveraged trades with a 100% win rate. The trader netted $2.2 million in profit in just two days.

“Notably, in the past 2 days, this whale closed two quick ETH long positions with a 100% win rate, netting $2.2 million in profit,” Spotonchain revealed.

The consistency of these trades has led to speculation that the activity is not random market speculation. Instead, it leans toward a sophisticated laundering operation or insider trading scheme.

AB Kuai Dong, a crypto market analyst, speculated that the funds used in these Hyperliquid trades could be linked to North Korean hackers. The analyst noted that North Korean cybercriminals have been known to test high-frequency trading strategies on crypto platforms as part of money laundering operations.

The analyst suggested they could be an attempt to clean illicit funds obtained through hacking. This assumption is based on the Hyperliquid trades’ anonymity and rapid execution.

“I am very curious about these large anonymous orders of Hyperliquid. Combined with the previous news about North Korean hackers testing Hyper trading, is it possible that these large and frequent 50-fold openings are all gray market funds laundering money?” the analyst posed.

Another analyst known as Ai on X supported this theory by pointing to previous research on high-leverage profits made on Hyperliquid. In early March, Ai reported that three addresses had generated $2.53 million in profit through GMX high-leverage trades.

Gambling or Insider Trading? Experts Weigh In

These addresses were linked to gambling platforms such as Roobet and AlphaPo. They had also interacted with ChangeNOW, an exchange favored by hackers. Ai speculated that the traders might not be insiders but expert gamblers using potentially stolen funds to execute high-risk trades.

“Insider or ultimate gambler? It is indeed more like the latter,” the analyst opined.

Crypto analyst Adolyb, who cited research from Coinbase’s Conor Grogan, provided further evidence of potential illicit activity.

“Coinbase people found out that it is a phishing address with 4 layers of jumps + gambling players,” Adolyb remarked.

According to Grogan, the crypto wallet responsible for some suspicious hyperliquid trades received funds from phishing attacks. He described the account as a “Roobet whale,” suggesting that the trader frequently engaged in high-stakes gambling on platforms historically associated with illicit fund flows.

Grogan noted that this individual had previously liquidated long positions just before a significant market event. According to the analyst, this indicates that their trades were not based on insider knowledge. Rather, stolen funds are used for gambling.

The reports have reignited concerns about the use of high-leverage trading platforms for illicit financial activities. While leverage allows traders to amplify their positions, it also allows criminals to move and disguise large sums of money rapidly.

The anonymity offered by decentralized and offshore exchanges further complicates efforts to track and regulate such transactions. Regulators and blockchain forensic firms will likely increase their scrutiny of similar activities. This is amidst mounting evidence linking Hyperliquid’s high-leverage trades to potentially illicit sources.

BeInCrypto data shows Hyperliquid’s token’s price is down almost 8% since Wednesday’s session opened. As of this writing, HYPE was trading for $13.35.

After a rough start to the week with massive liquidations, the crypto market has finally experienced some relief, with a rebound driven by favorable broader macroeconomic changes. 

Liquidations over the past day totaled $384.4 million, a significant drop from previous days. Meanwhile, the global market cap rose 1.1% over the last day.

Crypto Market Recovers After Massive Liquidations

The market’s dip was primarily driven by fears of a global recession, trade wars, and broader macroeconomic uncertainty. As a result, Bitcoin (BTC) and Ethereum (ETH) plunged to monthly and yearly lows.

This sharp decline led to widespread liquidations. Nearly $1 billion was liquidated from the market yesterday. Nonetheless, the latest data paints a slightly more favorable picture.

According to Coinglass data, $384.4 million was liquidated in the past 24 hours. Of this, $138.2 million came from long positions, while $246.2 million were short positions. 

Specifically, Bitcoin saw $186.7 million in liquidations, with $146.0 million attributed to short positions. Ethereum experienced $73.6 million in liquidations, with $40.3 million from long positions and $33.1 million from short positions.

Meanwhile, Bitcoin regained ground over $80,000, trading at $82,299. This marked a 3.6% increase over the past day. 

Notably, the recovery could be attributed to recent diplomatic developments. According to Bloomberg, Ukraine agreed to a temporary 30-day ceasefire in response to a US proposal. This has reduced geopolitical tensions that had previously weighed on the market. 

Furthermore, Ontario suspended 25% tariffs on electricity exports to Michigan, New York, and Minnesota. This was also a major step towards easing trade tensions.

US political figures, including House Speaker Mike Johnson, have also provided much-needed reassurance to the markets. Johnson suggested that President Trump’s economic policies, which initially contributed to market instability, would eventually stabilize the economy. 

“Give the president a chance to have these policies play out,” he said.

In addition, White House Press Secretary Karoline Leavitt noted that the market dip represented a temporary state rather than a definitive or permanent trend. 

“We are in a period of economic transition,” Leavitt stated.

She emphasized the idea that market numbers, such as stock prices, trading volumes, and liquidations, reflect a specific point in time and can evolve. These combined factors—political reassurances, easing trade tensions, and a reduction in geopolitical risks—have contributed to the crypto market’s recent recovery.

The crypto market experienced a dramatic downturn over the past 24 hours, with nearly $1 billion in liquidations wiping out traders’ positions. 

This sharp plunge followed a turbulent start to the week that had already seen $620.5 million in losses.

Crypto Liquidations Reach Nearly $1 Billion

According to Coinglass, 334,404 traders were liquidated in the past 24 hours, totaling $947.7 million. Long positions were the hardest hit, with $742.2 million liquidated. 

Meanwhile, short positions accounted for $205.5 million. This indicated that the market moved against those who expected prices to rise, causing them greater financial losses.

Bitcoin (BTC) saw the largest liquidation, with $317.9 million wiped out. Of this, $242.1 million was from long positions and $75.8 million from shorts. Ethereum (ETH) fared similarly, with $248.2 million in liquidations, $196.4 million of which was from long positions.

Adding fuel to the fire, significant movements of cryptocurrency by major players have intensified fears of a broader sell-off. 

According to Arkham Intelligence, Mt. Gox, the defunct exchange still distributing assets to creditors, transferred 11,834 BTC—valued at approximately $931.1 million—to an unknown address.

A few hours after this, Mt. Gox’s cold wallet again transferred 332 BTC worth $26.6 million to another address. These transfers came shortly after its earlier movement of 12,000 BTC worth $1 billion at the time.

Furthermore, Spot On Chain observed that after five months of dormancy, an Ethereum ICO whale deposited 7,000 ETH  worth $12.9 million to Kraken as the price dropped. The whale still holds 30,070 ETH ($54.4 million) in its wallet.

Additionally, Longling Capital transferred 21,000 ETH ($38.8 million) to Binance. In a separate incident, a whale sold 25,800 ETH at a $31.7 million loss to prevent further liquidation.

The latest wave of volatility was triggered by comments from President Donald Trump, who hinted at an impending recession.

“Look, we’re going to have disruption, but we’re ok with that,” Trump told Fox News.

His remarks sent shockwaves through financial markets, with stocks tumbling and cryptocurrencies bearing the brunt of the fallout. According to The Kobeissi Letter, a prominent financial newsletter, the decline erased the post-US Reserve announcement rally. The cryptocurrency market dipped $1.3 trillion from its peak on December 17, 2024.

“Not only does this mean crypto’s bear market has begun, but it’s also down 35% in three months,” the post read.

Notably, Bitcoin, the leading digital asset, fell to $76,600 today. This marked its lowest level in four months. It had slightly recovered to $79,939 at press time, still down 3.2% over the past day.

According to BeInCrypto data, Ethereum experienced an 8.4% decline over the past 24 hours. At press time, it was trading at $1,895. This drop marks the lowest price level for the cryptocurrency since late 2023, reflecting a significant downturn in its value.