26.03.2025
Mirjan Hipolito
Cryptocurrency and stock expert
26.03.2025

Hyperliquid to reimburse users after delisting JELLY perpetual futures

Hyperliquid to reimburse users after delisting JELLY perpetual futures Hyperliquid delists JELLY perps

Decentralized derivatives exchange Hyperliquid has delisted perpetual futures (perps) tied to the JELLY token after uncovering evidence of suspicious market activity.

Key Takeaways

- Hyperliquid delisted JELLY perpetual futures after detecting suspicious market activity involving a $6M short position.

- Most users will be automatically reimbursed by the Hyper Foundation, excluding flagged addresses.

- The JELLY token's price was manipulated, triggering self-liquidation to exploit the platform’s mechanics.

- Hyperliquid raised margin requirements after earlier multimillion-dollar ETH liquidation losses to reduce systemic risk.

The platform, which has rapidly emerged as a key player in Web3 leveraged trading, said in a March 26 statement that affected users—except those tied to flagged addresses—will be automatically reimbursed by the Hyper Foundation, its ecosystem nonprofit.

“This will be done automatically in the coming days based on onchain data,” the company said in a post on X. Hyperliquid noted that despite the disruption, its main liquidity pool (HLP) remained profitable, reporting $700,000 in net income over the past 24 hours.

Trading manipulation and platform response

The JELLY token, created by Venmo co-founder Iqram Magdon-Ismail as part of a Web3 social media project, has experienced extreme volatility. After briefly peaking at a $250 million market cap in January, it has since fallen to around $25 million.

According to AP Collective founder Abhi, the incident was triggered by a trader who opened a $6 million short position in JELLY and then intentionally “self-liquidated” by pushing up the token’s price on-chain. This manipulation threatened to trigger large losses for Hyperliquid had the trade not been closed.

Ongoing risk management challenges

This is not the first time Hyperliquid has encountered issues tied to leveraged trading. On March 14, the exchange increased its collateral requirements following a $4 million loss due to the intentional liquidation of a $200 million ETH long position. Since then, traders must maintain a minimum 20% margin on certain positions to mitigate the systemic risk of large trades.

JELLYJELLY price. Source: СoinGecko.

As DeFi platforms grow in popularity, the need for robust risk controls becomes increasingly critical. Hyperliquid’s swift response and user reimbursement may preserve trust, but the episode underscores the inherent volatility and vulnerabilities in emerging Web3 derivatives markets.

Read also: FCA warns against crypto investment, recommends stocks instead

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