---
title: "Hyperliquid Halts Withdrawals After $30M POPCAT Trading Chaos"
date: 2025-11-12
author: "Barry Elad"
featured_image: "https://sqmagazine.co.uk/wp-content/uploads/2025/11/hyperliquid-briefly-pauses-withdrawals-after-popcat-trading-fiasco.jpg"
categories:
  - name: "Cryptocurrency"
    url: "/crypto.md"
tags:
  - name: "News"
    url: "/tag/news.md"
---

# Hyperliquid Halts Withdrawals After $30M POPCAT Trading Chaos

A risky trading move involving the POPCAT memecoin forced Hyperliquid to freeze deposits and withdrawals, exposing vulnerabilities in the platform.

## Quick Summary – TLDR:

- Hyperliquid paused deposits and withdrawals following a suspicious $30 million trading strategy centered on POPCAT.
- A trader allegedly tried to inflate POPCAT’s price using multiple wallets and large buy orders.
- The manipulation attempt led to a $4.9 million loss for Hyperliquid’s liquidity provider vault.
- This event is raising concerns about leverage controls and platform maturity in decentralized exchanges.

## What Happened?

Decentralized perpetuals exchange **Hyperliquid temporarily halted deposits and withdrawals** after a **massive trading scheme involving POPCAT** caused major disruption. A trader reportedly manipulated the memecoin’s price using a coordinated strategy that ultimately **cost the platform millions**.

> 🚨 Hyperliquid under attack[$JELLYJELLY](https://twitter.com/search?q=%24JELLYJELLY&src=ctag&ref_src=twsrc%5Etfw) 2.0 attach on [@HyperliquidX](https://twitter.com/HyperliquidX?ref_src=twsrc%5Etfw), now with [$POPCAT](https://twitter.com/search?q=%24POPCAT&src=ctag&ref_src=twsrc%5Etfw)  
>   
> Someone withdrew $3M USDCC from [@OKX](https://twitter.com/okx?ref_src=twsrc%5Etfw), opened massive longs on Hyperliquid using 19 wallets, then got liquidated on ~$30M positions, losing $3M.  
>   
> When that happened, Hyperliquid HLP Vault… [pic.twitter.com/CzN32MBP0n](https://t.co/CzN32MBP0n)
> 
> — HodlFM (@Hodl\_fm) [November 12, 2025](https://twitter.com/Hodl_fm/status/1988649247864946808?ref_src=twsrc%5Etfw)

 ## A $30 Million POPCAT Gamble Gone Wrong

An onchain analyst going by the handle **MLMabc** revealed that the trading chaos began when a trader **withdrew $3 million USDC from OKX**, then **split the funds across 19 wallets**. By 14:45 CET, the trader began **placing massive buy orders on POPCAT**, totaling around **$20 million** at a price of **$0.21**, aiming to **create a large buy wall** and artificially prop up the price.

- The trader’s **long position ballooned to $30 million** across those wallets.
- When the artificial buy wall was pulled, POPCAT’s price dropped sharply.
- The sudden crash **triggered a liquidation cascade**, and Hyperliquid’s **automated liquidity provider (HLP)** was forced to absorb the position.

The fallout was quick. POPCAT’s value tanked further, resulting in **a $4.9 million loss** for Hyperliquid’s community-backed liquidity vault. Eventually, the platform had to **manually close the position** to prevent deeper losses.

## Withdrawal Freeze and Bridge Issues

Following the liquidation, Hyperliquid **paused deposits and withdrawals** around 11:22 a.m. ET. A screenshot confirmed the freeze was labeled as “**maintenance**” and was later validated by onchain data from ArbiScan.

Former Coinbase executive **Conor Grogan** highlighted the inactivity, noting that **Hyperliquid’s Arbitrum bridge had stopped processing withdrawals** for at least 21 minutes. However, he observed no signs of a [major hack](https://sqmagazine.co.uk/crypto-exchange-hacks-and-security-statistics/), stating that the **USDC bridge still held approximately $4.5 billion**, which indicated that **most funds remained safe**.

Grogan suggested that the pause might be a **precautionary or clawback measure**, possibly aimed at recovering funds from manipulative trades.

## Repeated Pattern of Exploits

This isn’t Hyperliquid’s first run-in with market manipulation. Back in March, a trader **shorted the Solana-based memecoin JELLYJELLY**, which similarly caused the protocol to suffer **around $12 million in unrealized losses**. These repeated incidents point to **potential weaknesses in the platform’s leverage and liquidation mechanisms**.

Some community members also criticized Hyperliquid for **not adjusting POPCAT’s maximum leverage** from 10x, which could have **helped mitigate the damage**.

## SQ Magazine’s Takeaway

To me, this is a clear wake-up call for [decentralized crypto exchanges](https://sqmagazine.co.uk/crypto-exchange-statistics/). Hyperliquid is one of the more promising DeFi platforms, but events like this show it still has some growing up to do. Letting a trader push the system to its limit with high leverage and multiple wallets? That should not be so easy. I really hope this pushes Hyperliquid and other platforms to rethink how they handle risk. We love decentralization, but **there has to be better guardrails when real money is on the line**.