North Korean hackers are reportedly kicking the tires on one of the most important and newest multi-billion dollar cryptocurrency projects – and the development is causing panic.

A cryptocurrency wallet linked to a North Korean hacking group recently lost nearly $500,000 on Hyperliquid, according to Taylor Monahan of MetaMask, a popular on-chain investigator and tracker of cryptocurrency activity in North Korea.

In Per Monahan's X post on Sunday, it was almost certain that this activity was a ruse to better understand Hyperliquid and identify potential security vulnerabilities.

Hyperliquid is a DeFi, or decentralized finance, project that runs on its own high-speed blockchain technology — which it is built on top of. resolutionpopular Ethereum Layer 2 network.

Late last month, Hyperliquid launched a native token via $1.6 billion airdrop For users. Since then, the value of the token, HYPE, has risen, peaking at a market cap of $100,000 More than $11 billion During the weekend.

But according to blockchain experts, Hyperliquid — an innovative project launched by a group of developers — has a number of critical security vulnerabilities that make it an ideal target for North Korea's massive hacking capabilities.

Because it was designed to prioritize transaction speed, Hyperliquid runs on just four validators, and MetaMask's Monahan said she has reason to believe those validators are also running from the devices Hyperliquid's founders use to access social media, video calls and other personal functions. .

He was Having employees click on a phishing email or message could give hackers control of the network and billions of dollars, if the hackers have not already secretly gained such control, Monahan said.

“If you're the guy running the four Hyperliquid Verifiers,” Monahan wrote in X's message mail"I'm going to shit my pants now."

North Korea's cryptocurrency hacking teams have evolved significantly Advanced methods To hack digital accounts in recent years. This year alone, those tactics have been a huge success for the nation $1.3 billion.

While some developers in the crypto community Repeat Monahan warns Monday to other cryptocurrency users It was rejected them as a "psychological operation" designed to damage Hyperliquid's reputation. It does not appear that Hyperliquid's founders have yet accepted Monahan's offer to review the project's security standards for free.

Neither Hyperliquid nor Monahan responded immediately DecryptionRequests for comment. However, on Monday morning, Hyperliquid Labs responded to reports of system vulnerabilities on Discord, in an attempt to placate the protocol's user base.

“There has been no exploitation by North Korea — or any exploitation for that matter — of Hyperliquid,” the company said. “All user funds are accounted for.”

This reassurance did not calm other experts. Nissim Edekiwaq, a cryptocurrency developer who previously led Andreessen Horowitz's cryptocurrency information security team, said Monday that his "hunch" is that North Korean hackers are already inside Hyplerliquid's infrastructure, learning how to leverage the system to its most effective extent.

Idikiwaq said in X mail He said he would be happy to place a call with the Hyperliquid team, but speaking directly with Monahan — a leading North Korean cryptocurrency hacking expert — would be more effective.

It seems that the market has made up its mind on this issue. On Sunday night, HYPE's price collapsed nearly 23% in a matter of minutes. The token is priced at $26.50 as of this writing, down approximately 21% since it reached its new peak price on Saturday.

Monday also saw, to date, the largest net inflow of funds from Hyperliquid in the project's history. About $211 million worth of USDC has already fled the exchange today, according to sponsored on-chain data Sand dunesout of a total of just over $2 billion.

Modified by Andrew Hayward