Hyperliquid Labs Refutes Claims of North Korea Exploits, Affirms Security of All User Funds

Hyperliquid, a notable on-chain perpetual futures exchange, is facing examination due to allegations of wallet activity associated with North Korean hackers.

In the wake of these claims, the platform’s token HYPE experienced a decline of over 25%, dropping from $34 to $25. The platform reassured its users that their funds were safe and accounted for.

Security Controversy or Misinterpretation? Hyperliquid’s Reaction to North Korean Hacker Allegations

The issue arose when Taylor Monahan, a security specialist from MetaMask, reported unusual trades involving wallets connected to North Korean hackers.

Monahan indicated that these wallets engaged in ETH trading on Hyperliquid, leading to liquidations surpassing $700,000.

DPRK’s trading career is…uh….going…..
tbh if i was the dude managing Hyperliquid’s 4 validators (or those fucking ghetto ass binaries on gh) I would be shitting my pants right now.
Hyperliquid dudes dont seem worried at all though so im sure its fine. pic.twitter.com/JrrU7t1sJe

— Tay (@tayvano_) December 22, 2024

On X (formerly Twitter), Monahan proposed that the activity was not typical trading but rather a potential test of vulnerabilities. “DPRK doesn’t trade. DPRK tests,” she tweeted.

The accusations led to a significant number of user withdrawals. Data from Hashed’s Dune Analytics dashboard indicated that over $194 million in USDC was withdrawn on Monday alone.

In response, Hyperliquid Labs refuted any claims of exploits or vulnerabilities on the platform. In a statement on its Discord channel, the team reassured users that their funds were secure.

The team stated,

“Hyperliquid Labs is aware of reports circulating regarding activity by supposed DPRK addresses; there has been no DPRK exploit—or any exploit for that matter—of Hyperliquid. All user funds are accounted for.”

Hyperliquid Labs: We are aware of reports circulating regarding activity by supposed DPRK addresses. There has been no DPRK exploit – or any exploit for that matter – of Hyperliquid. All user funds are accounted for. Hyperliquid Labs takes opsec seriously. No vulnerabilities have… https://t.co/VI46V2O00g

— Wu Blockchain (@WuBlockchain) December 23, 2024

The platform emphasized its strong security measures, which include a bug bounty program and adherence to best practices in blockchain analytics.

Hyperliquid Labs also addressed claims of unprofessional interactions with a security advisor, stating that the advisor’s behavior led the team to seek counsel from trusted partners instead.

The allegations and the resulting market uncertainty had an immediate effect on Hyperliquid’s native token, HYPE.

The token fell over 25%, from $34 on Sunday to a low of $25 on Monday. However, according to DexScreener, the price has since recovered and is currently trading at $27.

Despite the ongoing controversy, Hyperliquid continues to gain momentum. According to Dune Analytics, the platform represents over 55% of the trading volume in on-chain perpetual futures.

North Korean Hackers Steal Over $1.3 Billion in Crypto, Doubling 2023’s Theft Total

According to Chainalysis, North Korean hackers have doubled their cryptocurrency thefts from 2023 to 2024, amassing over $1.3 billion.

In its report dated Dec. 19, the firm disclosed that these hackers were responsible for 47 incidents, making up 61% of all cryptocurrency thefts in 2024. This represents a significant increase from the $660 million stolen in 2023.

Chainalysis observed a rise in the scale of individual heists. Attacks ranging from $50 to $100 million and those exceeding $100 million became more prevalent in 2024. The firm noted that the DPRK is becoming more adept at executing larger and quicker exploits.

North Korean hackers have been associated with some of the most significant breaches within the cryptocurrency sector. U.S. authorities frequently impose sanctions on entities involved in the country’s laundering activities.

Despite the increase in DPRK-related hacks, global cryptocurrency hacking activity saw a decline in the third and fourth quarters of 2024.

Chainalysis suggested that North Korea may be relying less on cryptocurrency theft due to strengthened ties with Russia. However, it cautioned about potential shifts by year’s end, noting that hackers often target during holiday periods.

The timing of reduced activity after July 1 coincided with Russian President Putin’s visit to Pyongyang, although Chainalysis stated that the connection remains uncertain.

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