- Four whales made $47.5M from XPL’s 200% spike on Hyperliquid, triggering manipulation claims.
- A massive short squeeze wiped out traders, with one losing $4.5M in a single position.
- Speculation links one whale wallet to Justin Sun, intensifying scrutiny of DEX liquidity and fairness.
The Plasma blockchain’s token XPL shot up nearly 200% on Hyperliquid — from $0.60 to $1.80 in minutes — and four whale wallets reportedly walked away with $47.5 million in profits. While traders called it one of the most violent short squeezes seen in recent memory, the community has also raised sharp concerns over whether the rally was engineered. Blockchain data from Spot On Chain flagged wallet 0xb9c as the main player, netting over $15M, while smaller traders suffered steep losses, including one who lost $4.5M on a single short position.
Short Squeeze or Whale Games?
The rally appeared to be triggered by whales stacking huge long positions, forcing short traders to cover rapidly and wiping out liquidity across the order book. This kind of forced squeeze can magnify price swings dramatically, and in this case, it cleared Hyperliquid’s market in minutes. Spot On Chain suggested that at least one of the whale accounts could be tied to Tron founder Justin Sun, adding to suspicions and fueling speculation across crypto Twitter.
DEX Transparency and Liquidity Under Fire
While decentralized exchanges (DEXs) are often praised for transparency, the event has exposed some of their weaknesses. Hyperliquid’s limited order book made it particularly vulnerable to manipulation by whales with massive capital. The surge evaporated just as quickly once the whales exited their longs, leaving smaller traders trapped in losses. The incident is now sparking debate about whether DEXs can provide the same fairness and safeguards as centralized platforms — or if large players will always find ways to exploit thin liquidity.
A Growing Controversy Around Justin Sun
The speculation around Justin Sun’s involvement has only intensified the backlash. While no official confirmation exists, wallet activity patterns and the scale of the trades have led many to suspect his hand in the manipulation. Whether Sun was directly involved or not, the controversy highlights the challenges regulators and traders face in maintaining fairness on decentralized markets, where power still tends to consolidate in the hands of a few big players.
