Rapid Cross-Chain Flight of Funds After the Hack
In the early hours of 10 October 2025, blockchain security firm PeckShield sounded the alarm that wallet 0x0cdC…E955 on the Hyperliquid perpetual-trading platform had been emptied of roughly $21 million.
Within minutes, 17.75 million DAI and 3.11 million MSYRUPUSDP were bridged from Hyperliquid’s native rollup to Ethereum, then fanned out through a lattice of fresh addresses.
Investigators note that a portion of the proceeds was funneled through a Monero-linked liquidity pool, a classic laundering path that obscures provenance by atomising transactions into privacy-centric chains.
The speed of the operation underscores the changed nature of crypto thefts in 2025. Attackers now rehearse escape routes in advance, scripting bridges, swaps, and mixers so that assets move the moment private keys are seized. Because Hyperliquid is non-custodial, no exchange freeze or rollback was possible; once the key was compromised, the attacker enjoyed the same permissions as the owner.
$16 Million Long Position Closure Raises Insider-Knowledge Questions
A second thread emerged when Hyperliquid trading records showed the sudden closure of a $16 million HYPE long position tied to the same wallet at almost the exact moment PeckShield’s alert went public. Roughly 100,000 HYPE tokens were liquidated for $4.4 million, then swapped into USDC and DAI before being dispersed across Ethereum and Arbitrum addresses.
On-chain analysts at independent research collective MLM argue this sequence of trades could only have been executed by someone with the compromised private key, suggesting the attacker exploited trading positions as well as spot holdings to maximise the haul.
Collateral Damage Beyond the Core Wallet
Follow-up traces show an additional $3.1 million siphoned from the Plasma Syrup Vault liquidity pool, together with smaller outflows totalling about $300,000 from ancillary wallets linked by common spending patterns. The breadth of addresses hit hints that the private key may have been stored in an application that indexed multiple accounts—an all-too-common practice among high-frequency traders chasing UX convenience.
Growing Wave of Private-Key Breaches Puts Spotlight on Key Management
The Hyperliquid incident is the latest entry in a troubling ledger: a Venus Protocol user on BNB Chain lost $27 million in September; Seedify’s
SFUND
token collapsed by 99 % after a $1.2 million drain blamed on North Korean operators; and security firm CertiK counts more than $1 billion stolen through key compromises in the past year alone. Unlike smart-contract exploits, these attacks bypass code audits entirely, targeting the weakest link—human key custody.
Experts point to several converging factors. First, phishing kits have become turnkey products sold on darknet markets, lowering the skill barrier for would-be thieves. Second, the rise of cross-chain bridges means a stolen key unlocks liquidity on multiple networks, complicating recovery. Finally, many DeFi power users still store hot-wallet keys on internet-connected devices for trading agility, despite repeated warnings to adopt cold storage or multi-signature schemes.
Implications for Platforms and Traders
For Hyperliquid, the breach is a reputational blow even though the protocol itself operated as designed. The team is reportedly evaluating optional account-abstraction features—such as social recovery and multi-sig defaults—to nudge users toward safer setups without sacrificing the platform’s self-custodial ethos.
Traders, meanwhile, face a stark calculus: either embrace slower but safer hardware-wallet workflows, or accept that efficiency comes with non-negligible key-theft risk. In an ecosystem where transactions are irreversible and global in scope, the Hyperliquid hack is a reminder that security hygiene—not smart-contract sophistication—remains the decisive line of defence.
