Hyperliquid Halts Deposits and Withdrawals After $25M Liquidations
Decentralized perpetual exchange Hyperliquid paused deposits and withdrawals on November 12, 2025. This followed a trader’s $3 million USDC bet on the POPCAT memecoin that caused $25 million in liquidations and a $4.9 million loss for Hyperliquid’s Hyperliquidity Provider (HLP).
The trader used 19 different wallets to open leveraged long positions with about 5x leverage. Total exposure reached between $25 million and $30 million. Initially, the trader placed roughly $20 million in buy orders at $0.21 per POPCAT token to artificially raise its price.
When the trader removed the large buy walls, POPCAT’s price collapsed quickly. All 19 wallets were liquidated, and the HLP community vault had to absorb the losing positions. Hyperliquid manually closed the open positions to prevent further damage.
Bridge Lock and Platform Response
Hyperliquid temporarily froze deposits and withdrawals via its Arbitrum bridge. Coinbase’s Director Conor Grogan confirmed withdrawals were halted for over 20 minutes. A Hyperliquid administrator clarified on Discord that the underlying blockchain was unaffected. The bridge lock was triggered by automated safety measures and lifted after about 25 minutes. User funds remained secure.
The incident reignited concerns among the community about market manipulation risks in low-liquidity crypto markets. It highlighted how such schemes can cause significant losses, even on decentralized platforms built with safety features.
POPCAT Price Drops 19% Amid Increased Volatility
The POPCAT token price fell approximately 19% within 24 hours to $0.1262. This decline extended POPCAT’s annual losses to over 91%, with its market cap dropping to nearly $123 million. Despite the price fall, on-chain trading activity stayed high as traders anticipated more short-term volatility.
Lower liquidity increased fears of future manipulation attempts. POPCAT is a Solana-based memecoin that gained popularity earlier in 2025 but now faces investor uncertainty following the Hyperliquid event.
Previous Manipulation Incident and Broader Risks
This is not Hyperliquid’s first major manipulation case. In March 2025, a similar event affected the JELLYJELLY memecoin. A trader’s short positions caused about $12 million in losses for the HLP vault. The platform responded by delisting JELLYJELLY amid criticisms of its governance and risk controls.
The recent POPCAT incident highlights DeFi’s ongoing challenges with leverage and liquidity. Though transparent and decentralized, platforms like Hyperliquid remain vulnerable to rapid market moves and manipulation, especially in thinly traded memecoin markets.
The event may prompt Hyperliquid to review its leverage limits and risk management frameworks. It also serves as a cautionary example for the wider DeFi community on the dangers posed by unregulated leverage and speculation in volatile crypto assets.
As of now, Hyperliquid has not announced when deposits and withdrawals will fully resume. The incident shows that even decentralized finance platforms must manage risks carefully to withstand sudden market shocks.
