A big whale jolted Hyperliquid late in the day, dropping $16 million worth of USDC onto the exchange and loading up on massive XPL longs within just a few minutes. That single move ripped through the thin order book, forced a cascade of liquidations, and sent the token flying more than doubling in price from around $0.58 to as high as $1.80 almost instantly.
A $16 Million Profit in Under a Minute
According to Lookonchain, the wallet behind the trade partially closed its position in less than a minute, securing $14 – $16 million in profit within an hour. Speculation quickly arose that the wallet might be linked to Tron’s Founder Justin Sun.
“Justin Sun just locked in $16M profit in under 60 seconds… Sent $XPL soaring to $1.80 (+200% in 2 minutes). And he’s STILL holding 15.2M $XPL ($10.2M) long,” one X user said.
Hyperliquid’s HLP Vault Caught in Volatility
While whales profited, Hyperliquid’s HLP vault earned around $47,000 in fees. However, the vault has also suffered a loss of $12 million during a similar JELLY token squeeze. This reflects the dual nature of liquidity provision: profitable in calm markets, but vulnerable to sudden wipeouts.
Hyperliquid previously refunded traders after the JELLY event and strengthened safeguards, yet both incidents trace back to a whale exploiting thin liquidity.
The Sequence of Events
The XPL surge began at 05:35 (UTC-4), when wallet 0xb9c…6801e went long on millions of XPL, clearing the order book and squeezing out mostly 1x hedging shorts. Within minutes, $16 million in profit was realized.
Funding came from two sources: 4.99M USDC transferred from 0x5dE…c03c3 three hours earlier and 10.98M USDT cross-chained via DeBridge from 0xae0…97150.
The Justin Sun link stems from a historical transfer: years ago, this wallet sent ETH to an address associated with him. But there is no direct evidence. The wallet had been quietly building small XPL longs since August 24. At present, it still holds $9.84M in 1x XPL longs, with unrealized profits of about $1,806,815.
Traders Call It a “Massacre”
Star Platinum described the impact: “Dropped 16M USDC into Hyperliquid… bought 15.2M XPL, wiped the order book and sent the price from $0.60 to $1.80 (+200%). The biggest victim was wallet 0xc2cb…edf9 forced out of a 7M USDC short. In total, 16.6M USDC in shorts were destroyed.”
He added that XPL perp volume hit $161M in 24h (+311%), open interest collapsed 70%, and fees spiked to $7.7M (ATH). Yet hours later, XPL fell back to $0.60.
The impact hit hard for individual traders as well. Retail trader Honey shared the blow on X: “WHAT A DAY. I JUST GOT LIQUIDATED ON @HyperliquidX FOR $1,000,000. MM manipulations on $XPL wiped out my entire position.
Honey expressed hope for a full investigation and a complete refund, adding that, in their view, Binance and other platforms were coming out ahead, calling the situation “outright cheating.”
For some, the losses were devastating. One trader posted on X, “Just lost $185k USDC on @HyperliquidX $XPL pump. No other exchange effected, only Hyperliquid. Have been a massive fan of Hyperliquid, but this is pure manipulation. Added a ton of margin to stay safe and lost it all.”
Crypto trader Nonzee echoed, “Justin Sun just locked in $16M profit in under 60 seconds… Easily one of the craziest liquidation cascades ever seen on Hyperliquid.”
Lookonchain confirmed, “Whale 0xb9c0 deposited 16M $USDC… sending the price soaring to $1.8 and liquidating everyone. He then closed his position and made a profit of over $14M in less than an hour.”
Lessons for Retail Traders
The XPL event underscores the risks of trading in thinly liquid markets. When oversized orders hit thin markets, they can completely clear the order book and set off a chain reaction of liquidations, leaving smaller traders with no way to respond.
For whales, this episode was another big payday. For retail traders, it was an expensive reminder of how unforgiving these markets can be.
Also Read: Crypto Trader Moves $215M Bitcoin on Hyperliquid to Buy ETH
