Decentralized perpetuals exchange Hyperliquid said it had paused deposits and withdrawals on Wednesday amid speculation that a trader tried to manipulate the price of the POPCAT memecoin.
A screenshot from the Hyperliquid platform showed that deposits and withdrawals were paused for maintenance around 11:22 a.m. ET. An ArbiScan transaction also confirmed the pause.
An onchain analyst known as MLMabc on X, speculated that Hyperliquid’s decision to pause transactions came after a trader took to the decentralized perpetuals exchange seeking to artificially prop up the price of POPCAT.
“About 13 hours ago, someone withdrew $3 million USDC from OKX and split it across 19 wallets … around 14:45 CET, he started longing millions worth of POPCAT, placing roughly $20 million worth of buy orders at $0.21,” MLMabc said. “The combined long position grew to around $30 million across those 19 wallets. When he removed the 8 figs buy wall, he got liquidated on the entire $20 million – $30 million POPCAT long within seconds, causing [Hyperliquidity Provider] to take over the position.”
“POPCAT then dumped further, resulting in a $4.9 million loss for HLP. Hyperliquid later manually closed the position,” they added.
According to the analyst, the trader was deliberately attempting “to mess with” Hyperliquid, and the “issue should be resolved soon.”
Hyperliquid’s issues are reminiscent of when the platform suffered a manipulation event in March as a trader shorted the Solana memecoin JELLYJELLY, which then led to the protocol assuming hefty losses. The squeeze caused the community-owned HLP vault to take on roughly $12 million in unrealized losses initially.
Despite Hyperliquid’s popularity, Wednesday’s pause is evidence that it has room to mature, according to The Block’s Research Director Steven Zheng.
“Today is another reminder that while Hyperliquid’s aim is ultimately to become the most liquid decentralized perpetual exchange competing against centralized exchanges, it is still far from that goal,” he said.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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