The trader behind recent “suspicious market activity” on Hyperliquid that led to the freeze and delisting of the Jelly my Jelly (JELLY) memecoin is potentially down almost $1 million from their actions. 

Blockchain analytics firm Arkham Intelligence said in a March 26 post to X that the trader attempted to manipulate the system to profit from price movements, withdrawing collateral before Hyperliquid’s liquidation system could catch up.

The trader opened three accounts within five minutes of each other, two with $2.15 million and $1.9 million long positions, and the third a $4.1 million short, to cancel out the long positions, according to Arkham in a post-mortem report. 

“This allowed him to build up leverage in an attempt to drain funds from Hyperliquid,” Arkham said.

Source: Arkham

When the price of Jelly pumped by over 400%, the $4 million short position entered liquidation, but the open short didn’t liquidate immediately because it was too large and instead passed to the Hyperliquidity Provider Vault (HLP), which is supposed to liquidate the position.

At the same time, the trader withdrew collateral from the other two accounts while having a “7-figure positive PnL to withdraw from,” Arkham said.

However, the “exploiter” quickly hit a wall when the accounts, which still had millions in unrealized profit and loss, were restricted to reduce-only orders, forcing them to sell the tokens in the first account on the market to recoup some of the funds.

Source: Arkham

Hyperliquid eventually closed the Jelly token market at a price of 0.0095, the same price as the trader’s short trade, which “zeroed out all floating PnL on the first two exploiter accounts.”

In total, Arkham says the trader withdrew $6.26 million, but at least $1 million is still in the accounts.

“Assuming he can withdraw this at some point in the future, his actions on Hyperliquid have cost him a total of $4,000. If he is unable to, he faces a loss of almost $1 million,” the blockchain analytics firm said.

Hyperliquid has since delisted perpetual futures tied to the JELLY token, citing evidence of suspicious market activity. 

Other traders have been using similar tactics 

This isn’t the first time Hyperliquid has had issues like this. On March 14, Hyperliquid increased margin requirements for traders after its liquidity pool lost millions of dollars during a massive Ether (ETH) liquidation.

Related: Bitget CEO slams Hyperliquid’s handling of “suspicious” incident involving JELLY token

A whale trader intentionally liquidated a roughly $200 million Ether long position on March 12, causing HLP to lose $4 million while unwinding the trade. 

Traders have also begun hunting whales on the platform, targeting prominent leveraged positions in a “democratized” attempt to liquidate them.

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The US Senate has passed a resolution to kill a Biden administration-era rule to require decentralized finance (DeFi) protocols to report to the Internal Revenue Service, which will now head to US President Donald Trump’s desk.

On March 26, the Senate voted 70-28 to pass a motion repealing the so-called IRS DeFi broker rule that aimed to expand existing IRS reporting requirements to crypto.

The Senate had voted to pass the resolution earlier in March, which also passed the House, but it was sent back to the Senate for a final vote before it could be sent to Trump.

The White House’s AI and crypto czar, David Sacks, has said Trump supports killing the rule.

This is a developing story, and further information will be added as it becomes available.

Nearly 58% of Argentinians said they don’t trust President Javier Milei following his involvement in the $4.6 billion Libra crypto scandal, according to a recent poll. 

“More than a month after the crypto fraud scandal broke out, how much do you trust Milei today?” polling platform Zuban Córdoba asked 1,600 respondents in its recently released March survey, to which 57.6% replied that they disapprove of him, while 36% said Milei still has their trust.

The remaining 6.4% said they weren’t sure, the report stated.

Percentage of trust that Argentines have in Milei after the Libra scandal. Source: Zuban Córdoba

This was the first time the question was asked within a Zuban Córdoba poll. However, several other metrics, such as Milei’s image and the national management approval rating, have plummeted considerably in recent months.

The latter of those metrics, for example, fell from 47.3% in November to 41.6% in March.

“Fifty-eight percent disapprove of Javier Milei’s management. Negativity increases slowly but steadily and seems to find no ceiling,” Zuban Córdoba said. 

“The change in tone and evaluation of the government is consolidating as more and more problematic fronts appear on the political agenda.”

Zuban Córdoba conducted its study between March 12 and March 14, and the sample size of 1,600 participants had a confidence level of 95% and a sampling error of 2.45%.

Another survey from the University of San Andrés conducted between March 11-20 with 1,020 respondents found that Milei’s approval rating dropped to 45%.

However, not all polls paint the same picture of President Milei. 

Data collected from Morning Consult between Feb. 27 and March 5 indicates that Milei still possessed a 62.4% approval rating after the Libra scandal.

Related: LIBRA memecoin orchestrators named as defendants in US class-action suit

Milei has distanced himself from Libra since the scandal, arguing he didn’t “promote” the LIBRA token in a controversial Feb. 14 X post — as fraud lawsuits filed against him allege — and instead merely “spread the word” about it.

The Libra (LIBRA) token soared to a $4.6 billion market cap shortly after Milei’s X post before tanking nearly 94% over the next few hours.

Argentina’s opposition party called for Milei’s impeachment but has had limited success thus far.

President Milei’s party still in lead as election looms

The controversy comes as the next Argentine election is set to take place on Oct. 26.

Despite the negative results, Milei’s La Libertad Avanza party is still most likely to take out the next Argentine election, with 36.7% in favor of the libertarian party, while Unión por la Patria comes in next at 32.5%.

However, only 43% of Argentine respondents believe that Milei — an economist prior to taking office — has sufficiently controlled inflation, while 63% of those polled oppose Milei’s efforts to secure a new loan from the International Monetary Fund.

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