Hyperliquid Labs has firmly denied allegations of insider trading after movements on the network raised concerns in the community about the wallet shorting HYPE coins
This statement comes at a sensitive time for decentralized perp exchanges, as in a few days, auditors will vote on a proposal that could permanently remove nearly USD1 billion worth of HYPE from the system.
Hyperliquid clarified the wallet allegations before the significant HYPE burn vote in Thailand.
This controversy arose when several traders pointed out a wallet that may be linked to the Hyperliquid team, which seemed to have opened a short on HYPE during the latest unlock.
According to Hyperliquid's statement, the address 0x7ae4c156e542ff63bcb5e34f7808ebc376c41028 does not belong to any current employees or contractors.
The individual controlling this wallet had their contract terminated in the first quarter of 2024, prior to the token activity that sparked new interest in December.
Creating a transparent financial future requires a fundamental commitment to clear ethics and legalities, Hyperliquid Labs stated. Everyone involved with Hyperliquid Labs, whether employees or contractors, is bound by strict ethical standards concerning HYPE tokens.
The content of the statement also addressed comprehensive trading policies, including a complete ban on the team trading derivatives with HYPE, both on the short and long sides, and reaffirmed a stance against insider trading.
Integrity is something that Hyperliquid Labs does not compromise on, the team added. Violations of these policies will lead to immediate contract termination and potential legal action.
By directly referencing the identified wallet, Hyperliquid stated that the individual is no longer affiliated with Hyperliquid Labs, and their actions do not reflect the standards or values of the team.
The team clarified that this is part of the responsibility to maintain the long-term stability of the ecosystem, especially as HYPE's market profile continues to expand.
This moment is deemed very interesting, as Hyperliquid is about to enter crucial governance decisions that could significantly alter the tokenomics.
Hyper Foundation proposed a vote through auditors to certify that all HYPE coins accumulated by the Assistance Fund are officially considered burned. This vote will end on December 24.
The Assistance Fund will automate the protocol's trading fee into HYPE and store these coins in an address system without a private key, making it inaccessible without a hard fork.
USD1 billion HYPE token may be burned; Hyperliquid wants auditors to vote to burn nearly USD1 billion HYPE from the Assistance Fund. The vote will end on December 24 and could remove more than 10% of HYPE from both circulating and total supply, as noted by analysts from Coin Bureau.
Supporters view this proposal as aligned with Hyperliquid's broader operational approach, as the protocol is well-known for not raising funds from major investors, distributing a 31% airdrop since its launch, and processing trading volumes of over USD3.4 trillion with just 11 team members.
As allegations of insider trading clash with a crucial decision regarding supply, the coming days may determine the credibility, governance reputation, and long-term status of Hyperliquid in the decentralized derivatives market.
