Hyperliquid Confirms $HYPE Shorting Address Linked to Ex-Employee Fired in

A former Hyperliquid employee, terminated in 2024, has been linked to a wallet actively shorting the protocol's native token, $HYPE. The revelation cuts through the typical 'team alignment' narrative and exposes a stark internal conflict playing out on-chain.

The Anatomy of an On-Chain Betrayal

Blockchain analytics don't lie. The identified address didn't just sell—it opened leveraged short positions against $HYPE, a deliberate bet on its decline. This isn't mere profit-taking; it's a targeted financial assault by someone with intimate knowledge of the project's operations and potential vulnerabilities.

Governance Tokens and Grudges

The incident throws cold water on the idealized vision of decentralized governance. Token-based voting power means little when a disgruntled insider can weaponize their insights against the very community they once served. It's a stark reminder that in crypto, your biggest risk might be the person who used to have the keys to the server room.

Trust, but Verify the On-Chain Ledger

For investors, the takeaway is brutal. Due diligence now extends beyond the whitepaper and into the personal and professional dynamics of a team. A protocol's security isn't just about smart contract audits—it's about human capital management and the financial incentives of everyone who's ever been on the payroll. Because in the end, some exits are messier than others, especially when they're financed by betting against your former colleagues' success—a move so cynical it would make a Wall Street short-seller blush.

Community Questions Source Of Post-Launch $HYPE Sales

The scrutiny intensified after trackers alleged the wallet sold 1,200 $HYPE and continued to offload more through Time-Weighted Average Price-style selling, with one widely shared estimate putting a further 3,700 $HYPE on the tape, worth about $110,000 at the time.

NEW: HYPERLIQUID TEAM CLARIFIES THAT AN ADDRESS SHORTING $HYPE, SPOTTED BY THE COMMUNITY, BELONGS TO AN EX-EMPLOYEE TERMINATED IN Q1 2024 – "THIS INDIVIDUAL IS NO LONGER ASSOCIATED WITH HYPERLIQUID LABS, AND THEIR ACTIONS DO NOT REFLECT OUR TEAM’S STANDARDS OR VALUES" pic.twitter.com/Za3vQDhuMq

Those claims fed into a broader debate over whether post-launch selling was coming from insiders, especially as traders watched $HYPE perps and spot liquidity for signs of persistent pressure.

Hyperliquid Moves To Contain Fallout From Wallet Claims

Hyperliquid addressed the speculation in a Discord announcement, pairing the clarification with a reminder of internal conduct rules for anyone associated with the project.

To address recent community inquiries regarding the address, the team wrote that it belongs to an ex-employee terminated in Q1 2024.

“This individual is no longer associated with Hyperliquid Labs, and their actions do not reflect our team’s standards or values.”

In the same message, Hyperliquid said it enforces strict ethical standards around the $HYPE token, including a prohibition on team members trading $HYPE derivatives and a zero tolerance stance on insider trading, with violations triggering immediate termination and potential legal action. “Integrity is non-negotiable at Hyperliquid Labs.”