The platform has experienced a significant exodus of assets as a result of the potential Hyperliquid breach by DPRK-backed hackers.
Millions of USDC have been transferred from Hyperliquid, a decentralized layer 1 exchange that connects to Arbitrum, a layer 2 network created on Ethereum. This follows a series of posts on X (formerly Twitter) by Tayvano, also known as Tay, one of the most prominent voices in crypto security. In these posts, Tay expressed apprehension regarding the activities of hackers associated with the Democratic People’s Republic of Korea (DPRK) on the Hyperliquid bridge.
Tayvano’s post cited several addresses associated with DPRK hackers who suffered a loss of over $700,000 in trading on Hyperliquid. It appears that the alarm has incited significant fearmongering within the Hyperliquid community, resulting in the withdrawal of more than $114 million in USDC from the platform.
According to Tayvano, the $700,000 loss from those trading addresses was not an error but rather a test to identify platform vulnerabilities. She stated, “You all, the Democratic People’s Republic of Korea does not engage in commerce.” “DPRK conducts experiments.”
This is not the type of news that Hyperliquid anticipates, as it recently achieved a 24-hour trading volume of over $13 billion as a result of the increased trading activity on its platform, which was primarily driven by its airdrop event, which took place less than a month ago. It is ironic that its liquidity may have also coincided with its appearance on the hackers’ radar.
It is important to mention that this is not the first instance in which Tayvano has alerted the Hyperliquid team to the activities of North Korean hackers on its trading platform. Two weeks ago, Tay issued an alert and extended an invitation to collaborate with the Hyperliquid team in order to reduce the potential threats that DPRK hackers may pose to the platform.
As of the time of this writing, Hyperliquid has not provided any commentary, and its token, HYPE, is currently down by more than 20%. Two significant billionaires are liquidating assets worth nearly $4 million.
As per Entropy Advisors on X, Hyperliquid has four validators. If three of these four validators are compromised, it could result in a loss of $2.2 billion in USDC across the bridge.
Although this has not yet transpired and may never occur, the possibility has not served to alleviate the persistent FUD, as it raises concerns regarding the security of the Hyperliquid platform. It also presents a continuous issue for bridges in general.
Hyperliquid and other blockchain bridges have been promoted as the future of on-chain transactions; however, they have been identified as relatively susceptible to hacking. Defillama estimates that they are responsible for over 31% of the total value of funds lost due to breaches.
The loss of hundreds of millions has been the consequence of popular bridge breaches, including the Ronin, Binance, and Nomad bridge thefts. The most recent bridges to experience breaches and lose millions of dollars as a consequence of cross-chain vulnerabilities are the orbit chain, socket, and ALEX bridge.
The alert that Tayvano issued has prompted the participation of other stakeholders in the blockchain security sector who hold different points of view.
Also Read: SpaceX employs stablecoins to facilitate Starlink payments
Wallets