Coordinated liquidation attack on Hyperliquid: 11 accounts withdrew $1.62M margin before allowing a $12M XPL long position to be liquidated into HLP at mark price, causing an 18% price drop.
DeFi & Yields ·
Eleven Hyperliquid accounts withdrew a combined $1.62M in margin from XPL long positions across an eight-minute window, after which a $12M XPL position was liquidated into the protocol's backstop vault (HLP) at mark price, coinciding with an 18% price drop in XPL. The accounts were newly created on October 29–31, each funded with $145k–$243k via CCTP, and seven additional withdrawal attempts were rejected for insufficient balance, suggesting operators extracted every available dollar before allowing liquidation.
The mechanics suggest coordination: draining margin first reduced the capital required to trigger liquidation, which then transferred the full position to HLP at mark price with zero slippage, allowing the backstop vault to absorb the subsequent price decline. During the one-minute crash to 0.0705, Binance perps saw $11.2M in XPL volume while Hyperliquid itself traded minimally. All eleven accounts ended with zero balance after liquidation, while HLP's daily loss fluctuated between +$21k and −$655k during unwinding.
It remains unclear whether the same operators held short positions on Binance, which would constitute the profit mechanism if the crash itself was the intended outcome. The pattern mirrors a prior March 2025 incident involving an ETH whale that cost HLP $4M.