DeFi's Trust Abyss: Fake Audits and 95% Yields Swallow $3.6M

A $3.6 million rug pull was executed on HyperVault, a yield farming protocol built on the Hyperliquid blockchain, as developers siphoned user funds and disappeared, according to blockchain security firm PeckShieldAlert. The stolen assets were bridged from Hyperliquid to Ethereum, converted to ETH, and subsequently funneled into Tornado Cash—a privacy tool often used to obscure transaction trails. The incident, detected on September 26, 2025, left HyperVault’s social media accounts, including its X (Twitter) profile and Discord server, inaccessible, with the project’s website also offline. At the time of the exploit, HyperVault had reported $6.01 million in total value locked (TVL), though the exact proportion drained remains unclear Hyperliquid's HyperVault Project Rugged for $3.6M, Devs Disappear^[1].

The scam followed a pattern of red flags ignored by users. On September 4, community member HypingBull raised concerns about HyperVault’s claimed security audits, noting that the project’s developers falsely cited audit firms like Spearbit, Pashov, and Code4rena. Direct inquiries to Pashov via Telegram confirmed the firm had no association with the project, while Code4rena’s website showed no audit activity related to HyperVault. Despite these warnings, users continued to deposit funds, enticed by the platform’s advertised annualized yields of up to 95% on HYPE tokens—a return far exceeding typical DeFi benchmarks HyperVault Triggers Rug Pull Alarm as $3.6M Disappears …^[2].

HyperVault’s collapse highlights vulnerabilities in the broader Hyperliquid ecosystem. While the platform itself remains operational, the rug pull adds pressure to its market position amid competition from ASTER DEX, which recently processed $13 billion in daily perpetual futures volume. Arthur Hayes, a prominent figure in the crypto space, had previously sold his entire HYPE position for $823,000, citing $11.9 billion in upcoming token unlocks. Now trading at $35.50, HYPE’s price has dropped 23% weekly, though Hayes is polling followers about re-entering the token $3.6M Drained From Hyperliquid DeFi Platform Hypervault in …^[3].

The incident underscores persistent risks in DeFi, where unregulated projects often promise unrealistic returns to attract liquidity. HyperVault’s use of Tornado Cash and its abrupt disappearance mirror tactics seen in other scams, such as CrediX Finance’s $4.5 million exit scam in August 2025. Analysts note that projects with unverified audits and opaque team identities are particularly susceptible to exploitation. In this case, HyperVault’s failure to disclose team identities or provide verifiable audit documentation left users exposed DeFi protocol Hypervault vanishes after $3.6 million suspected …^[4].

Hyperliquid’s infrastructure has faced prior challenges, including a March 2025 exploit where a trader manipulated the JELLY token, causing a $13.5 million loss. Technical issues, such as a July 2025 37-minute trading outage, have also raised concerns about the platform’s reliability. While Hyperliquid’s core infrastructure remains unaffected by HyperVault’s collapse, the incident could erode trust in its ecosystem, particularly for third-party protocols that lack rigorous security measures Hyperliquid’s HyperVault Project Rugged for $3.6M, Devs Disappear^[5].

For affected users, recovery appears improbable. PeckShieldAlert emphasized that the use of Tornado Cash has rendered the $3.6 million trail effectively untraceable. Community members advised HyperVault users to revoke wallet permissions and avoid interacting with unaudited contracts. The incident serves as a cautionary tale for DeFi participants, reinforcing the importance of due diligence in evaluating projects with high-yield promises What Should HyperVault Users Do After $3.6 Million Rug Pull?^[6].