The on-chain exchange Hyperliquid has recently become a market focus. Besides its native token HYPE's stunning surge, it has sparked heated discussions due to recent cybersecurity and money laundering controversies. Web3 cybersecurity team Salus founder Mirror Tang revealed that Chinese law enforcement agencies have cracked three cases of cryptocurrency money laundering using this platform in recent months, reigniting regulatory concerns.
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ToggleMirror Tang Accuses Hyperliquid of Becoming a Money Laundering Breeding Ground
Salus founder Mirror Tang (@mirrorzk) revealed this morning that since March 2025, Chinese law enforcement has uncovered three money laundering cases through Hyperliquid, with almost identical operational methods:
Opening high-leverage positions on Hyperliquid, deliberately causing liquidation to create the appearance of losses, while simultaneously taking opposite positions on centralized exchanges (CEX) to profit, ultimately whitewashing funds.
This "dual platform hedging + pretending to lose money" operation has raised high alerts in the community about Hyperliquid's lack of KYC and risk control measures under its decentralized facade. Tang specifically called out co-founder Jeff Yan: "If such risks are not actively addressed, the platform may face strict regulation."
(Fatal Blow to Hyperliquid(HYPE): North Korean Hackers Eyeing Latent Risks, Centralized Exchange without KYC)
Advertising for Hyperliquid or Money Laundering? James Wynn's High-Leverage Trading Suspicions
He directly pointed out that this operation is almost identical to the well-known high-leverage trader James Wynn, who became famous for profiting from hundred-fold leverage on Hyperliquid, but suffered a severe setback in May 2025, with his account funds once being liquidated.
More worryingly, Wynn's fund sources are suspected to be related to the now-defunct exchange FTX's quantitative company Alameda Research, which was already liquidated due to misappropriation of user funds and fraud allegations. If these funds subsequently flow into Hyperliquid, the platform may have already become a breeding ground for illegal fund transfers.
(Who is Hyperliquid's On-chain Whale James Wynn? $1.2 Billion High-Leverage Gamble Just for Hype?)
ZachXBT Tracks Black Money Source: Mysterious Whale Actually a Fraud Repeat Offender
On-chain detective ZachXBT also exposed earlier this year. He tracked a "mysterious trader" who profited over $20 million through leverage operations on Hyperliquid and GMX, with addresses associated with multiple gambling platforms, money laundering addresses, and phishing websites.
Eventually, through a payment record and a UK phone number, he confirmed the trader's true identity as William Parker, a repeat offender previously arrested multiple times in the UK and Finland for fraud and casino theft, also known in media as Alistair Peckover. His return to old practices on-chain further highlights Hyperliquid's review loopholes and the crisis brought by its anonymous mechanism.
(ZachXBT: Mysterious Hyperliquid Whale Suspected to be a Fraud Repeat Offender, Leveraged Operation Profits $20 Million Reveals Tracks)
Decentralization and KYC Paradox: Hyperliquid's Crossroads
Hyperliquid's rapid rise is built on two core advantages: "No KYC Required" and "High Leverage with Excellent Liquidity". However, these advantages have now turned into the platform's biggest risks:
Not only does it mask the fact that its actual structure is similar to a centralized exchange, but it has also become the best tool for money laundering, arbitrage, and illegal fund operations.
The consecutive warnings from Mirror Tang and ZachXBT are gradually pushing Hyperliquid to the forefront of scrutiny. If the platform fails to enhance transparency and introduce stronger cybersecurity and anti-money laundering mechanisms, it may face regulatory issues similar to the cryptocurrency mixer Tornado Cash.
Risk Warning
Cryptocurrency investment carries high risks, and its price may fluctuate dramatically. You may lose all your principal. Please carefully assess the risks.
US President Donald Trump revealed during a White House interview this morning (6/6) that he had just finished a phone call with Xi Jinping, where they reached a consensus on rare earth issues and previewed upcoming high-level exchanges between the US and China. Additionally, Trump expressed disappointment with Musk's public criticism of canceling electric vehicle subsidies and opposing the "Big and Beautiful Act", and sarcastically suggested Musk has "Trump Syndrome" after leaving the White House. Regarding the Russia-Ukraine war, Trump used the analogy of "two kids fighting", emphasizing that if both sides cannot resolve the conflict, he would implement tough sanctions if necessary.
ToggleKey Points
- Xi-Trump call went smoothly, rare earth dispute reached consensus, Treasury Secretary Bessent will lead trade delegation to China for negotiations.
- Musk blasted 'Big and Beautiful', Trump sarcastically said: Left White House with 'Trump Syndrome'.
- Trump compared Ukraine-Russia to 'children fighting', again criticizing Biden's ineffectiveness.
After Xi-Trump Dialogue, US-China Trade Returns to Normal
Trump first stated that he just finished a phone call with Xi Jinping, and they have successfully reached a consensus on key issues such as rare earth.
He revealed that Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer will go to China together to continue negotiations and clarify agreement details.
Regarding Chinese students coming to the US, Trump said there's no problem and welcomed Chinese students, but he also hopes that well-known US universities will provide a list of foreign students.
Musk Harshly Criticizes 'Big and Beautiful', Trump: He Has Trump Syndrome
When asked about Musk's criticism of Trump's 'Big and Beautiful Act', Trump was quite disappointed. He emphasized that 'Big and Beautiful' brought the largest tax cut plan in history, worth $1.6 trillion, and according to the Congressional Budget Office (CBO), tariff revenue is estimated to reach $2.88 trillion in the next ten years.
Trump believes Musk opposes 'Big and Beautiful' because the bill removed electric vehicle subsidies, suggesting that Musk lost the portion he previously benefited from. He also pointed out that Musk only started criticizing after leaving office, and sarcastically added:
"Many people start to miss it after leaving the White House, then develop hatred. This is some kind of Trump Syndrome."
Harshly Criticizes Biden for Allowing Ukraine-Russia War to Expand, Compares Two Countries to Children Fighting
Trump believes the Ukraine-Russia war could have been avoided due to Biden's ineffectiveness. Trump reiterated that if he were president, the war would not have happened, and emphasized having a 2-hour-plus dialogue with Putin, using children fighting to describe Ukraine-Russia:
"Sometimes, pulling them apart is not as good as letting them fight for a while before separating them."
Trump Supports Ukraine but Will Not Spend More Money, Focus is on Stopping the War
Regarding continued support for Ukraine, Trump responded:
"I support Ukraine, but the focus is on stopping the war, not continuously spending money. And this war is destroying culture."
He pointed out that the US and Europe have invested about $500 billion in Ukraine and should think about how to end this war.
Risk Warning
Cryptocurrency investment carries high risks, and prices may fluctuate dramatically. You may lose all your principal. Please carefully assess the risks.
