Whale Trader's $20M Profit Leads Hyperliquid to Revise Collateral Rules

On March 20, onchain sleuth ZachXBT revealed the identity of a mysterious whale who had made significant profits from highly leveraged trades on decentralized perpetuals exchanges. According to ZachXBT, the whale is a British hacker named William Parker, who was previously known as Alistair Packover. Parker was arrested in 2023 for allegedly stealing around $1 million from two casinos. Additionally, Parker had made headlines a decade ago for allegations of hacking and gambling. ZachXBT's findings are based on a phone number provided by a person who allegedly received a payment from the whale trader’s wallet address. Public wallet addresses associated with the whale trader were also found to have received proceeds from past onchain phishing schemes.

The whale trader gained prominence after profiting approximately $20 million from highly leveraged trades, with some trades using up to 50x leverage. On March 12, the trader intentionally liquidated an approximately $200 million Ether (ETH) long position, causing Hyperliquid’s liquidity pool to lose $4 million. Despite this, the whale earned profits of some $1.8 million. Hyperliquid stated that the liquidation was not an exploit but a predictable consequence of how the trading platform operates under extreme conditions. In response, Hyperliquid revised its collateral rules for traders with open positions to prevent similar occurrences in the future. On March 14, the whale took another multimillion-long position, this time on Chainlink (LINK).

ZachXBT's investigation highlights the risks associated with highly leveraged trading and the potential for significant losses in decentralized exchanges. The whale's actions have raised concerns about the security and stability of these platforms, particularly under extreme market conditions. The incident has also underscored the importance of robust risk management practices and the need for exchanges to continuously review and update their collateral rules to protect against such events. ZachXBT noted that Parker, who has a history of fraud and gambling, is unlikely to change his behavior despite past legal troubles. This revelation adds another layer of complexity to the already volatile world of decentralized finance, where the actions of a single trader can have far-reaching consequences.