Hyperliquid, a Layer 1 blockchain and decentralized exchange, experienced a sharp drop in token value and Total Value Locked (TVL) over the weekend after reports of possible North Korean hacker involvement surfaced.
Security expert Taylor Monahan flagged the activity of suspicious wallets linked to the Democratic People's Republic of Korea (DPRK) on December 22nd, causing a 20% drop in the price of HYPE and TVL tokens.
Monahan, who works with MetaMask, revealed that $458,000 worth of North Korea-related addresses were removed on Hyperliquid.
In his posts, Monahan warned that North Korea's activity suggests reconnaissance rather than trade, writing: “North Korea does not trade. North Korea's tests, which hint at a possible future attack.
Hyperliquid's TVL fell from $2.56 billion to $2.05 billion, while HYPE token fell from $34 to $27 before a modest recovery.
In an official statement on Discord, the Hyperliquid Labs team denied any breach, saying:
“There has been no exploitation of Hyperliquid in North Korea – or any abuse for that matter”.
The team added that they had been contacted by a security researcher but declined to help, citing “unprofessional conduct” and instead consulting with trusted third parties.
Cygaar, a developer and contributor to the Abstract chain, assured the community that actions such as blocking USDC or rolling back the chain can be implemented in case of an exploit.
He added:
I wouldn't freak out about it right now – there are guardrails in case the worst happens.
The incident highlights the ongoing risks of cyberattacks in the DeFi sector, where North Korean-affiliated hackers have increasingly targeted vulnerabilities to finance government operations.
As of press time, Hyperliquid's HYPE token had more than recovered from yesterday's drop, trading at around $313 after climbing 15%.
