Crypto Whale Manipulates JELLY Price, Profits $6.26M, Causes 400% Surge

An unidentified crypto whale, referred to as the "hyperliquid whale," manipulated the price of the JELLY memecoin on the decentralized exchange Hyperliquid, resulting in a profit of at least $6.26 million. The whale executed a complex trading strategy by opening three large positions within five minutes: two long positions worth $2.15 million and $1.9 million, and a $4.1 million short position that offset the longs. The short position, due to its size, was not immediately liquidated but was absorbed into the Hyperliquidity Provider Vault (HLP), designed to handle large positions.

The whale's actions led to a 400% price surge in JELLY, but the entity still holds nearly $2 million worth of the token. Blockchain investigator ZachXBT revealed that five addresses linked to the whale hold approximately 10% of the JELLY supply on Solana, with all tokens purchased since March 22, 2025. Despite Hyperliquid freezing and delisting the JELLY memecoin due to suspicious market activity, the whale continues to sell the tokens.

This incident is part of a series of memecoin scandals and insider schemes that exploit investor hype. The JELLY token's collapse serves as a reminder of the risks associated with investing in tokens lacking fundamental value. Alvin Kan, the chief operating officer at Bitget Wallet, noted that hype without fundamentals does not last in the decentralized finance (DeFi) space. He emphasized that while momentum can drive short-term attention, it does not build sustainable platforms. Projects built on speculation rather than utility are likely to be exposed, especially in a market where capital moves quickly and unforgivingly.

The JELLY memecoin meltdown also raises questions about the balance between decentralization and centralized control. Hyperliquid's intervention to freeze and delist the token blurs the line between the decentralized ethos and centralized control, highlighting the need for robust mechanisms to prevent such exploits in the future. The Hyper Foundation, Hyperliquid’s ecosystem nonprofit, will automatically reimburse most affected users for their losses, except for those belonging to the exploiter. This move aims to protect users but also underscores the challenges faced by decentralized exchanges in maintaining their ethos while dealing with such exploits.

As the cryptocurrency market continues to evolve, incidents like these underscore the importance of building platforms that prioritize security and transparency. Ensuring that investors are protected from malicious activities is crucial for the long-term sustainability of the DeFi space. The JELLY memecoin incident serves as a cautionary tale for investors and platforms alike, emphasizing the need for vigilance and robust security measures in the rapidly changing world of cryptocurrency.