What Is The JELLY Crypto Controversy? Are Binance Attempting To Undermine Hyperliquid?
A synchronized group of whales, thought to be supported by prominent crypto asset exchanges like Binance and OKX, influenced the price of the JELLY token on the Hyperliquid (HYPE) DEX.
Wallets associated with various significant CEXs initiated a substantial JELLYJELLY short on Hyperliquid, sending the crypto community into chaos, leading to a drop of over 20% in the HYPE coin at one point.
A colossal big investor possessing 124.6M $JELLY ($4.85M) is manipulating the price of $JELLY (jellyjelly) aiming to inflict a rekt of $12M on Hyperliquidity Provider (HLP)!
Initially, he sold off $JELLY, leading to a price crash that left HLP with a passive short position of 398M $JELLY ($15.3M).
Following that, he purchased… pic.twitter.com/kYcKshV4rl
— Lookonchain (@lookonchain) March 26, 2025
Analytics Protocol Lookonchain Identifies Market Manipulation of JELLY on Hyperliquid
As per Lookonchain, the initial wallet made a significant short position of JELLY on Hyperliquid while concurrently acquiring JELLY tokens from external sources.
The trader was later observed pulling their margin, which compelled Hyperliquid’s HLP (its integrated market-making protocol) to absorb the $4.5 million wrecked on the short position. At its peak, this short position put HLP at risk of over $6 million in losses.
During this time, another wallet address on Hyperliquid initiated a long order on JELLY, briefly going up over $12 million.
Subsequently, the whales continued to buy back JELLY, pushing the losses from the original short position beyond $12 million.
Upon detecting suspicious crypto market movements, the validator group gathered and voted to delist JELLY perpetuals.
All users except flagged addresses will be compensated by the Hyper Foundation. This will occur automatically in the upcoming days based on on-chain data. There is no…
— Hyperliquid (@HyperliquidX) March 26, 2025
Due to traders triggering a short squeeze on the coin, its market capitalization surged over fivefold from $10 million to more than $50 million. JELLY has since declined to a $25 million crypto market cap, but had it peaked at $150 million, Hyperliquid would have encountered full liquidation.
In the wake of the whales’ price manipulation of JELLY on its network, the price of its native token, HYPE, saw a drastic drop, falling from more than $16 to below $13.
Nevertheless, Hyperliquid has since delisted JELLY and closed the short position, thus avoiding the substantial losses it faced. Following delisting and evading liquidation, HYPE is trading back at $14.84.
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ZachXBT Reveals Connections Between Several Leading Exchanges and the Hyperliquid Wallets
It would be even funnier if this outcome occurred because both JELLY manipulators 0x20e8 & 0x67f were just funded through Binance on Arbitrum.
0xf5c07ec0acfc371c05a5de9882c8c90bfa1c071fa9356e6710e3db17d5abdd48
0xf171d527b9a277b895a02ca4b7c5ee081cb94a8932a60eeadbdcb02ea729b524…— ZachXBT (@zachxbt) March 26, 2025
While the immediate threats and drama appear to have subsided for Hyperliquid, the renowned on-chain investigator ZachXBT quickly jumped into the issue.
He discovered that the two Hyperliquid wallets implicated in the JELLY price manipulation, 0x20e8 & 0x67f, are linked to centralized exchanges such as OKX, MEXC, Bybit, and Binance. Both addresses indicate interactions and have previously received funding from these exchanges before executing the attack on Hyperliquid.
Many members of the crypto community suspect this assault on Hyperliquid might be a coordinated strike by the major exchanges to eliminate the highly successful Hyperliquid DEX.
This suspicion is reinforced by the fact that during this upheaval, both OKX and Binance declared they would be listing perpetual pairs for the JELLY meme token.
It seems like an incredible coincidence that both exchanges opted to list the identical coin that nearly led to Hyperliquid’s complete liquidation due to trading market manipulation on its protocol.
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Multiple malicious actors pushed Hyperliquid close to liquidation through a price manipulation of the JELLY meme coin
- Hyperliquid faced a potential $12 million exposure but has now delisted JELLY and closed the position
- ZachXBT uncovered that the two rogue wallets on Hyperliquid had recently received funding from Binance and OKX
- Many in the crypto community suspect the attack on Hyperliquid may have been intended by major exchanges to eliminate competition
- As Hyperliquid was nearing liquidation, both OKX and Binance opted to list JELLY, the same coin that instigated the frenzy
The post What Is The JELLY Crypto Drama Are Binance Trying To Sabotage Hyperliquid? appeared first on 99Bitcoins.
