Nikolas Sargeant
Decentralized perpetual futures exchange Hyperliquid has confirmed that a wallet address accused by community members of shorting its native $HYPE token belongs to a former employee who was terminated in the first quarter of 2024, addressing speculation about potential insider trading activity.
The address, 0x7ae4…1028, surfaced repeatedly in late November and throughout December on X, where users tracked on-chain movements related to $HYPE token distributions and sales following the token's launch. Community posts described the wallet as a suspected team or insider address, pointing to spot holdings of approximately 170,600 $HYPE along with transfers that appeared to route activity toward the HyperEVM network.
Scrutiny intensified after blockchain trackers alleged the wallet sold 1,200 $HYPE and continued offloading tokens through Time-Weighted Average Price-style selling strategies. One widely circulated estimate suggested the address sold an additional 3,700 $HYPE worth approximately $110,000 at the time, though these figures represent community analysis rather than officially confirmed data.
The allegations contributed to broader debate within the Hyperliquid community about whether post-launch selling pressure originated from insiders with privileged access to token distributions. Traders monitoring $HYPE perpetual futures and spot liquidity expressed concerns about persistent selling that could indicate coordinated insider activity rather than typical market dynamics.
Hyperliquid addressed the speculation in a Discord announcement, combining clarification about the specific wallet with a reminder of internal conduct policies governing anyone associated with the project. "To address recent community inquiries regarding the address, the team wrote that it belongs to an ex-employee terminated in Q1 2024," the statement read.
"This individual is no longer associated with Hyperliquid Labs, and their actions do not reflect our team's standards or values," the announcement continued, distancing the organization from the wallet's trading activity while acknowledging the connection to a former staff member.
In the same message, Hyperliquid outlined strict ethical standards governing $HYPE token trading, including an absolute prohibition on team members trading $HYPE derivatives and a zero tolerance policy on insider trading. The exchange stated violations of these policies trigger immediate termination and potential legal action against offenders.
"Integrity is non-negotiable at Hyperliquid Labs," the statement emphasized, signaling the organization's position on trading ethics as it seeks to contain fallout from the wallet controversy.
The incident highlights ongoing challenges cryptocurrency projects face in managing token distributions and preventing insider trading, particularly during launch phases when token allocations to team members, advisors, and early contributors create concentrated holdings that can influence market dynamics if sold aggressively.
Hyperliquid's disclosure that the wallet belonged to a terminated employee raises questions about enforcement of post-employment restrictions on token trading and whether the individual retained access to tokens allocated during their tenure with the organization. The exchange did not specify the reasons for the employee's termination or whether those reasons related to trading conduct.
