Hyperliquid Dips on North Korea Hack Fears

Hyperliquid, the red hot Layer 1 blockchain and decentralized exchange, is facing its first real challenge since its token generation event on Nov. 29, after potential North Korean hacker wallets were flagged transacting on the platform.

Taylor Monahan, a security expert working with Metamask, highlighted the suspicious activity on Dec. 22 after DPRK-associated (Democratic People’s Republic of North Korea) addresses active on Hyperliquid were liquidated for $458,000.

Monahan reiterated in a follow-up post that “DPRK doesn’t trade. DPRK tests,” implying that the group is familiarizing themselves with Hyperliquid to find an attack vector.

She went on to share a message she had sent to the Hyperliquid team two weeks prior, offering help to the team to mitigate any potential threat. “I really want to emphasize that these are the most sophisticated and rapidly evolving of all the DPRK threat groups. They are creative and persistent," she wrote in the message.

Hyperliquid’s TVL fell 20% to $2.05 billion on the news, and the HYPE token also dipped 20% from $34 to $27 before rebounding.

The Hyperliquid Labs team responded to the situation in its official Discord and said, “There has been no DPRK exploit - or any exploit for that matter - of Hyperliquid.”

The team also confirmed that a security party had contacted the team and cited a lack of professionalism and insults from the unspecified party. “Given the level of professionalism displayed, Labs conferred instead with trusted parties and confirmed it is following best practices.”

Cygaar, a developer and contributor to Abstract chain, took to X to break down the situation. He cited potential lines of defense such as Circle freezing any USDC that is drained or Arbitrum rolling back the chain in the face of an attack.

“I wouldn't be full-on panicking over this right now - there are guard rails in place should the worst possible outcome happen,” Cygaar concluded.