Whales Strike Sends XPL on Hyperliquid Up 200%, $38M Pocketed in Under an Hour

In one of the most dramatic episodes of market manipulation seen this year, a group of whales launched a coordinated strike on Hyperliquid’s XPL token, wiping out short positions and reaping close to $38 million in under an hour. The manipulation sent XPL soaring more than 200 percent before retracing, underscoring the fragility of pre-launch token markets.

The Manipulation: Order Book Obliteration

The whale, operating from address 0xb9c...6801e, had been building positions since August 24. Using 3x leverage, the operator accumulated XPL position through small, undetected transactions before depositing 16 million USDC to fund the operation.

At 9:35 PM UTC on August 26, the whale struck. The operator opened massive long positions that instantly "swept clean" the order book, liquidating all short positions and driving XPL’s price to surge over 200% from the $0.58 range to a peak of $1.80.

According to @mlmabc, the whale partially closed their position within 60 seconds, locking in $16 million in profit. However, this wasn't just one player in a coordinated attack. Lookonchain reported that three whale wallets working together wiped out other traders' positions and profited nearly $38 million in under an hour.

The manipulation exploited a critical vulnerability in XPL's current pre-trading phase. Plasma's $373 million token sale in July 2025 created a $500 million fully diluted valuation, but the token won't officially launch until later this year. Many investors who purchased XPL in the public sale were hedging with 1x short positions to protect against pre-launch volatility. These hedgers became perfect targets as their predictable positioning them easy targets for the coordinated squeeze.

Devastating Liquidation Cascade

The collateral damage was severe. 116,031,170 XPL was liquidated within 10 minutes, including the largest single liquidation which got liquidated for $7 million. @Cbb0fe, posted: "Felt smart hedging on @HyperliquidX 10% of $XPL allocation 1x short and a lot of collateral to cover. 2.5M loss ggwp."

The Speculation: Is It Justin Sun?

The crypto community has been buzzing with speculation about the identity of the manipulator. The community speculated that this wallet belongs to Justin Sun, the founder of Tron.

The theory stems from the whale address having transferred ETH to known Justin Sun wallets five years ago. However, no definitive proof has emerged linking Sun to the operation.

HYPE Hits New High

Despite the whale manipulation event, HYPE surged to a new all-time high today at $51.15.

Market Lessons

The incident highlights the risks of trading in pre-launch markets with limited liquidity. When liquidity is moderately thin, a sufficiently large order can pierce through multiple price levels, triggering a chain of liquidations.

The XPL manipulation represents one of the most dramatic examples of market manipulation on Hyperliquid.