The post Hyperliquid Under Scrutiny After On-Chain Links to Ex-Employee appeared on BitcoinEthereumNews.com.

Former employee linked to HYPE shorts raises fresh doubts on Hyperliquid compliance. Wallet trails show cross-network transfers connecting Hyperliquid, Arbitrum, and Polygon. Large leveraged positions contradict Hyperliquid’s zero-tolerance stance on insider trading. Hyperliquid faces renewed scrutiny after on-chain data tied continued HYPE short positions to a former employee. The situation follows earlier enforcement actions and raises fresh concerns about compliance credibility. Consequently, market participants now question whether internal controls extend beyond public statements. In early 2024, Hyperliquid dismissed an employee for insider trading violations. At the time, the company emphasized strict enforcement and internal discipline. However, developments in late 2025 revived attention on that same individual. Notably, Hyperliquid confirmed that a large HYPE shorting incident traced back to the former employee’s wallet. Blockchain records show continued trading activity linked to the identified address. Hence, observers argue that enforcement may not have fully prevented ongoing participation. The  activity occurred directly on Hyperliquid, amplifying reputational concerns. 1/ In Q1 2024, Hyperliquid terminated an employee for insider trading. In December 22, 2025 the company linked a massive shorting incident on the HYPE token to this individual confirming that the wallet involved belongs to him and reiterating its zero tolerance policy toward such… pic.twitter.com/i47V1rlZlb — Eye (@eyeonchains) December 23, 2025 Wallet Trail Connects Activity Across Networks On-chain analysis shows that the wallet labeled 0x7Ae4 remains active. The Hyperliquid team previously linked this address to the former employee. Additionally, transaction history shows that the address originated from Arbitrum funding. The Arbitrum wallet 0xA2c5a179777e5cACEb6bb9d0ceBe7e2A1826aD45 funded 0x7Ae4. Later, that same wallet transferred funds to the Polygon address 0x5a629E148f9e0a33F56ac9A7e441a70357725A27. Analysts believe this move is aligned with heavy Polymarket usage. At that Polygon address, the Polymarket account name appears as trytings. Moreover, records show that 0x5a62 received roughly $66,000 USDC from Hyperliquid between September and November. These transfers establish…

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Filed under: News - @ December 25, 2025 12:22 pm