TechFlow news, on June 6, Mirror Tang (@mirrorzk), founder of Web3 security firm Salus, posted on social media stating that since March this year, Chinese law enforcement agencies have cracked three cases involving the use of HyperLiquid for cryptocurrency money laundering. The method involved exploiting HyperLiquid's high-leverage liquidation mechanism to hedge and cleanse illicit proceeds, creating artificial liquidation losses on HyperLiquid while establishing reverse positions on centralized exchanges to profit, thereby laundering the funds. Salus will release a research article in collaboration with law enforcement authorities to formally disclose this information.
Mirror Tang also pointed out that this strategy closely resembles the recent actions of whale James Wynn, who opened highly leveraged contracts and ultimately lost $100 million in profits.
Mirror Tang urged Hyperliquid co-founder Jeff to take this issue seriously, warning that failure to address the current lack of risk control measures could lead to high risks of regulatory intervention.
