Hyperliquid Faces Decline in Token Value and TVL
Hyperliquid, a Layer 1 blockchain, and decentralized exchange, experienced a significant drop in token value and total value locked (TVL) over the weekend following reports of potential involvement by North Korean hackers.
Security Concerns Raised by Taylor Monahan
Security expert Taylor Monahan raised concerns about suspicious wallet activity linked to the Democratic People’s Republic of Korea (DPRK) on Dec. 22. This discovery led to a 20% decrease in the HYPE token price and TVL.
Monahan, known for her collaboration with MetaMask, disclosed that DPRK-associated addresses had been liquidated for $458,000 on the Hyperliquid platform.
In her warnings, Monahan emphasized that the DPRK’s actions appeared to be more focused on reconnaissance rather than trading, indicating a potential future attack. She stated, “DPRK doesn’t trade. DPRK tests.”
Response from Hyperliquid Labs
Despite the decline, Hyperliquid Labs issued an official statement on Discord denying any breach, including a DPRK exploit. The team clarified that they had not experienced any exploit and rejected assistance from a security researcher due to “unprofessional conduct,” opting to seek guidance from trusted third parties instead.
Cygaar, a developer and contributor to the Abstract chain, assured the community that precautionary measures, such as freezing USDC or rolling back the chain, could be implemented in the event of an exploit. He stated, “I wouldn’t be full-on panicking over this right now — there are guard rails in place should the worst possible outcome happen.”
Implications for DeFi Sector
This incident sheds light on the ongoing risks of cyberattacks within the DeFi sector, particularly as DPRK-affiliated hackers increasingly exploit vulnerabilities to fund state operations.
Despite the initial setback, Hyperliquid’s HYPE token managed to recover from the recent decline and was trading at around $313, reflecting a 15% increase.
