Four Whales Accused of Manipulating XPL Price, Earning $47.5M on Hyperliquid

TLDR

• Four whales made $47.5M from XPL’s 200% rally on Hyperliquid amid manipulation allegations.

• XPL’s price surged to $1.80, prompting concerns over market manipulation and liquidity issues.

• A trader suffered a $4.5M loss due to the price manipulation, raising questions about decentralized exchanges.

• Justin Sun is speculated to be behind one of the whale accounts, adding fuel to the controversy.

Four cryptocurrency whales have made a staggering $47.5 million in profits from the sudden 200% surge in the price of XPL, the token launched by the Plasma blockchain. The token spiked from around $0.60 to over $1.80 in a matter of minutes, catching the attention of the crypto community and raising concerns about potential price manipulation.

The price rally, which took place on the decentralized exchange Hyperliquid, was seen by many as one of the largest short squeezes in recent memory. Blockchain data platform Spot On Chain identified wallet 0xb9c as the largest orchestrator behind the surge, making over $15 million in profits. The rapid increase in price has led to allegations that these whales manipulated the market for personal gain, leaving several traders with significant losses.

Hyperliquid Whale Manipulation and Short Squeeze Concerns

The sudden spike in XPL’s price is being called one of the wildest short squeezes the market has witnessed. Spot On Chain pointed out that these whale addresses, with one address allegedly linked to Tron founder Justin Sun, caused a dramatic shift in the market by clearing the entire order book and liquidating several short positions.

The manipulation seems to have been orchestrated by strategically placing large long positions, which forced other traders to cover their shorts, contributing to the surge.

While decentralized exchanges (DEXs) are typically considered more transparent and secure than centralized exchanges, the rapid price movement on Hyperliquid has raised questions about the reliability of these platforms. One trader, identified only as CBB on X, reported a loss of $2.5 million on a short position, further highlighting the risks of trading in volatile markets. The situation calls into question how well decentralized exchanges are equipped to handle such market manipulation.

XPL Price Rally and Liquidity Issues

The surge in XPL’s price was not only a windfall for the whales involved but also showcased some of the liquidity and risk management concerns associated with decentralized exchanges. Despite Hyperliquid’s decentralized nature, the lack of adequate safeguards allowed these whales to exploit vulnerabilities in the system.

Blockchain data suggests that as the whales closed their long positions, the price of XPL dropped just as quickly as it had risen, leaving many traders at a disadvantage.

The price manipulation has also raised issues regarding liquidity on Hyperliquid. Despite the sudden surge in price, the platform’s decentralized nature means it operates with a limited order book, making it more susceptible to manipulation by large traders with substantial capital. This has caused some to question whether decentralized exchanges can maintain the same level of market fairness as centralized exchanges.

Speculation About Justin Sun’s Involvement

Adding to the controversy is speculation that Justin Sun, the founder of Tron, may be involved in one of the whale wallets. On-chain sleuths have pointed to wallet 0xb9c as potentially being linked to Sun, due to its strategic movements and involvement in clearing the order book. The wallet’s swift actions in liquidating positions and realizing significant profits in a short time have only fueled further suspicions of manipulation.

While there is no official confirmation regarding Sun’s involvement, the wallet’s activity and the timing of the market movements have raised eyebrows. The speculation adds a layer of intrigue to an already controversial event, with many crypto community members calling for greater transparency and better oversight in the space.

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