Hyperliquid Bleeds $4.9M in Failed POPCAT Pump—When Memecoins Bite Back

Another day, another crypto casino chip gets tossed into the degens' ring. Hyperliquid just learned the hard way that playing with meme tokens isn't all rainbows and 'wen lambo.'

The damage: A cool $4.9 million vanished faster than a Telegram admin during a rug pull. All thanks to a botched attempt to manipulate POPCAT's price—proof that even 'sophisticated' platforms aren't immune to the gravitational pull of memecoin madness.

Who needs Wall Street short squeezes when you've got anonymous devs and leverage-happy traders turning cat memes into financial WMDs? The real surprise here? That the loss wasn't an order of magnitude higher.

Silver lining for crypto maximalists: At least this $4.9 million 'educational expense' didn't require a taxpayer bailout. Progress, sort of.

TLDR

• A trader withdrew $3 million USDC from OKX and spread it across 19 wallets to manipulate POPCAT token prices on Hyperliquid
• The trader created a $20-30 million leveraged long position and placed $20 million in buy orders near $0.21 to artificially inflate prices
• After removing the buy orders, POPCAT prices crashed, liquidating the trader’s position and their $3 million collateral
• Hyperliquid’s community liquidity vault absorbed $4.9 million in bad debt after the manipulation attempt failed
• The platform temporarily paused deposits and withdrawals following the incident on Wednesday morning

Decentralized derivatives platform Hyperliquid suffered a $4.9 million loss on Wednesday after a trader attempted to manipulate the price of POPCAT memecoin. The incident resulted in the platform temporarily halting deposits and withdrawals.

Someone just manipulated $POPCAT to attack #Hyperliquid, burning through $3M of their own funds — and causing $4.9M in losses for the Hyperliquidity Provider (HLP).

The attacker withdrew 3M $USDC from #OKX yesterday, split it across 19 wallets, and deposited it into #Hyperliquid… pic.twitter.com/lnwsRSspFv

— Lookonchain (@lookonchain) November 13, 2025

According to blockchain analyst Lookonchain, the trader withdrew $3 million in USDC from centralized exchange OKX. The funds were then divided across 19 separate wallets to disguise the manipulation attempt.

The trader used these wallets to build a Leveraged long position in POPCAT worth between $20 million and $30 million. This strategy involved placing approximately $20 million in buy orders near the $0.21 price level.

The buy orders were designed to create artificial demand for the token. By concentrating such large orders at a specific price point, the trader aimed to push POPCAT prices higher.

The Manipulation Unravels

Once the position had grown sufficiently large, the trader suddenly removed the buy orders. This action triggered an immediate crash in Popcat prices as the artificial support disappeared.

The price collapse led to cascading liquidations of leveraged positions on the platform. The trader’s own $3 million collateral was liquidated within seconds as prices fell.

Hyperliquid’s community-owned liquidity vault, known as HLP, serves as a safety mechanism for liquidations on the platform. When a trader’s collateral is exhausted during liquidation, the vault absorbs remaining losses.

In this case, the HLP vault had to cover $4.9 million in bad debt after the collateral was gone. The vault operates as a backstop to maintain platform stability during extreme market events.

Platform Response and History

Hyperliquid closed the position manually following the liquidation event. The platform’s decision to pause deposits and withdrawals came as operations stabilized after the incident.

This is not the first time Hyperliquid has faced trading manipulation issues. In March, a trader’s short position on solana memecoin JELLYJELLY caused losses for the protocol.

Steven Zheng, Research Director at The Block, stated the pause demonstrates Hyperliquid still needs to mature as a platform. Despite its growth, the exchange has not yet achieved the liquidity levels of established decentralized perpetual exchanges.

One market participant called the event “peak degen warfare” on social media. They described it as manufactured demand followed by a coordinated flush of liquidity.

The attacker’s strategy exploited thin market depth on the platform. Automated liquidity provider absorption mechanisms became a vulnerability during the manipulation attempt.

The incident raises questions about security measures on DeFi platforms. Trading schemes like this one expose weaknesses in how decentralized exchanges handle market manipulation.

Hyperliquid did not immediately respond to requests for comment about the incident. The platform has since resumed normal operations after the temporary pause.