Binance founder and former CEO Chapeng Chao (also known as CZ) is accused of the HyperLiquid attack that drained $5 million from the liquidity pool. However, the billionaire said he was not involved and has nothing to do with the exchange.
After an unknown whale causes chaos in Hyperliquid, The crypto community considered this not a random liquidation, but a deliberate stress test or attack aimed at destabilizing Hyperliquid’s liquidity system. The community pointed to CZ for that.
But he answered the speculation I’m saying, “It’s nice to know that in your head I’m living rent free (…) But I haven’t used another CEX in eight years.”
Yet the community doesn’t acknowledge it. One X user said he could have instructed someone else to manipulate the market on his behalf. another I wrote, “He denies everything. LOL. Look no further than last week’s interview. He denied having any business dealings with WLFI, even after they had a clear business agreement with WFLI for $1. Denying the truth is a big no-no for this guy.”
Crypto community seeks funds transfer from Hyperliquid
As a result of this attack, the crypto community began urging each other to withdraw funds from HyperLiquid. According to them, this is not the first incident at HyperLiquid this year and raises new questions about how exchanges deal with liquidity concentrations and systemic risk.
1 user said, “Even though it was only $5 million, we had to stop withdrawals (…) The hyperfags are in a complete panic.”
Last month, HyperLiquid, although smaller than its rival Binance, experienced the highest total dollar-equivalent trades liquidated during a 24-hour decline, totaling $10 billion. The exchange suffered from low liquidity and long clearing times.
Panic selling overwhelmed Hyper Liquid’s order book. HyperLiquid’s order book was designed for high-speed, high-volume perpetual transactions on the Layer 1 chain. Meanwhile, Dune data shows that Binance dominates spot trading volume. However, despite steady growth until mid-2025, Hyperliquid’s share remains below 10%.
POPCAT crashes by 20% or more within hours after attack
as reported According to Cryptopolitan, a whale withdrew $3 million USDC from OKX and split the funds among 19 wallets on Hyperliquid. He started opening large long positions on POPCAT. To create the illusion of strong demand, he put up a huge buy wall of $0.21 and has $30 million worth of orders remaining on his books.
However, the wall was removed without any warning. Prices plummeted instantly. As a result, it took a long time to liquidate their own positions and that of all other traders. The trader lost $3 million in collateral and Hyperliquid’s HLP system automatically absorbed the open position.
This caused HLP to incur an additional $4.9 million in losses, causing a further decline in the overall token.
Previously, POPCAT had experienced a prolonged decline characterized by a prolonged period of low trading activity. However, yesterday, POPCAT’s trading volume increased tenfold to ~$230 million. The price of the token has fallen by 25% in the past 24 hours. The token is trading at $0.1244.
CZ joins Peter Schiff to debate Bitcoin vs. tokenized gold
As attacks on CZ and Binance continue, the exchange revealed the following: discussion between Chao and gold advocate and economist Peter Schiff. This will take place on December 4th as part of Binance Blockchain Week 2025, which will be held at Coca-Cola Arena in Dubai from December 3rd to 4th.
The discussion will focus on Bitcoin and tokenized gold. Two bulls, one for gold and one for cryptocurrencies, separately explain why they support them.
The discussion started with X, where CZ expressed concerns about Peter Schiff’s idea of tokenized gold. He noted that it relies on a third-party administrator and called it a “trust me bro” token.
Peter Schiff challenged CZ to a discussion about Bitcoin and tokenized gold and asked them to learn more about their different perspectives. CZ agreed to the offer and proposed holding Binance Blockchain Week in Dubai.
