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The decentralized derivatives platform Hyperliquid suffered a loss of about $4.9 million in a market manipulation of POPCAT token prices. After days of Crypto Twitter pointing to Binance’s CZ, analysts have found a new suspect. BTX Capital and founder Vanessa Cao have been accused of involvement in the manipulation, a claim she vehemently denies.
On November 12, an attacker used over 26 wallets to create a buy wall of about $25 million buys on POPCAT to inflate the price and create an illusion of strong demand and price support. However, once the attacker removed the buy wall, the price of POPCAT plummeted drastically, causing liquidations across the board and about $4.9 million losses for Hyperliquid’s liquidity provider vault.
Blockchain forensic analysts quickly identified patterns suggesting that the manipulative activity was not isolated. Several tokens, including TST, ZEREBRO, JELLYJELLY, and HIFI, showed similar suspicious trading behaviors, and BTX Capital’s founder, Vanessa Cao, is now in the spotlight for the wrong reasons.
Vanessa Cao and BTX Capital’s position on the manipulation
On-chain investigator SpecterAnalyst on X published an analysis of the POPCAT manipulation by examining on-chain data and trading patterns. Specter highlighted that the attacker deployed about $3 million in USDC from the exchange OKX, and a wallet (0x0A11…773C3), which was involved in manipulating TST some months ago.
The wallet used to manipulate TST received 0.003 ETH from 0xad67, which was forwarded through a chain of wallets to pay for gas for a wallet 0xc10, which then deposited about $600,000 in USDT to OKX on August 10.
A critical connection is a multisig wallet, which moved about 50 million AKI tokens and is linked to 0xf9785A1a5149C021482CF4b7Bffe6883B927025b, a public wallet allegedly registered to Vanessa Cao with the ENS name “vanessacao.eth”. The address was allegedly directly funded by BTX Capital’s official wallet address on the Polygon blockchain on March 6.
In response to the allegations, Cao issued a denial of any involvement in the market manipulation in a tweet stating, “The wallet you listed does not belong to me”, adding that she does not engage in on-chain hedging.
Public statements linked to Cao emphasize that neither she nor BTX Capital engaged in or endorsed the tactics leading to the Hyperliquid losses.
Cao doubled down in her denial: “I urge you to conduct a thorough investigation and issue an apology for the slander caused by your extremely poor and unprofessional analysis.”
With the accusatory fingers now directed at BTX Capital and Cao, Binance’s Changpeng Zhao (CZ) is now out of the firing line.
Targeted attack or not, Hyperliquid takes a hit
The $4.9 million loss was the latest incident to shake confidence in Hyperliquid and its resilience against sophisticated price attacks. It had to temporarily halt withdrawals to prevent a bank run and further financial instability. There is no denying the vulnerability concerns around DeFi platforms, where market manipulation via leveraged tokens can cause serious damage to liquidity pools and traders.
Some Crypto Twitter commentators have even insinuated that some of these manipulations are not purely profit-driven, but rather intended to inflict reputational damage on decentralized exchanges.
This could be the case here since the attacker lost about $4 million in collateral, unless they opened a counter leverage position on a centralized exchange.
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