$HYPE wallet selling traced to an ex-employee, not the team, calming concerns over insider trading.
Token rebounded ~3% despite broader market weakness, showing early signs of stabilization.
Investors now focus on Hyperliquid’s fundamentals and the upcoming Dec 24 supply vote.
Decentralized exchange Hyperliquid faces renewed attention after a wallet suspected of shorting $HYPE was traced to an ex-employee. The individual, terminated in Q1 2024, sparked community debates over potential insider selling.
Wallet 0x7ae4…1028 was flagged for moving about 170,600 $HYPE and selling significant amounts soon after the token’s launch. Consequently, traders worried that insider activity might pressure $HYPE’s spot and perpetual liquidity.
Hyperliquid clarified in Discord that the wallet’s actions do not reflect the team’s standards. “This individual is no longer associated with Hyperliquid Labs, and their actions do not reflect our team’s standards or values,” the team emphasized.
Community scrutiny intensified after trackers alleged the wallet sold 1,200 $HYPE, followed by Time-Weighted Average Price-style transactions. One estimate suggested an additional 3,700 $HYPE was sold, totaling roughly $110,000 at the time. Moreover, online discussions fueled speculation about team involvement in post-launch selling.
Hyperliquid reinforced its commitment to ethical standards, stating it prohibits team members from trading $HYPE derivatives and maintains zero tolerance for insider trading. Violations trigger immediate termination and potential legal action. Integrity remains non-negotiable at Hyperliquid Labs.
Market Reaction and $HYPE Fundamentals
Despite the controversy, $HYPE has shown signs of recovery. Crypto Winkle noted that $HYPE rose about 3% in a day, even amid broader market weakness. Momentum losses appear to be slowing, and oversold conditions are starting to ease.
Additionally, resolving concerns over insider selling removes a significant psychological overhang for investors. Attention is now shifting back to Hyperliquid’s core fundamentals and the upcoming supply vote on December 24.
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