The Hyperliquid community woke to news that $3.6 million held by HyperVault had vanished, prompting a sharp drop in trust toward every DeFi project tied to the chain. The first to report the loss labels it a deliberate theft and says the money trail ends inside Tornado Cash, a mixer that breaks the link between sender and receiver. The loss exposes previous audit claims as empty words and recovery looks remote once coins enter the mixer.
PeckShield data published show 752 ETH moving straight into Tornado Cash, a step that freezes most legal options. Reports blames unaudited smart contracts and design gaps inside HyperVault, arguing these weaknesses enabled the loss and complicate accountability.
Developers stated that Spearbit, Pashov and Code4rena had reviewed the code, yet none of those firms issued reports, undercutting assurances that had been used to calm users. The false comfort, paired with offers of high yield, lured investors into ignoring red flags despite mounting risks.
The following steps for Hyperliquid
The case beside Stable Magnet and similar pulls to show a pattern in which unaudited code plus market rewards create a system-wide hazard. Tornado Cash adds another hurdle, as the U.S. Department of Justice has already probed the mixer for laundering ties, meaning investigators will face extra delays tracing funds.
Trust and adoption are hit first, with users stepping back from fresh launches on Hyperliquid as confidence in the chain’s security and oversight erodes. Liquidity and price pressures follow, as traders mark down outlooks for the HYPE token and reduce exposure to perceived risk.
Regulatory risk intensifies because mixer usage and cross-border flows draw tighter legal watch, potentially inviting more scrutiny across associated projects.
The need for governance hardens, with victims asking for veto rights, verifiable audits and repayment plans to restore credibility.
Key points include $3.6 million missing, 752 ETH reaching Tornado Cash (PeckShield), audit claims by Spearbit, Pashov and Code4rena declared false, and a pattern that matches earlier rug pulls, reinforcing the demand for transparent controls.
Hyperliquid must now install real governance, prove audits and, if possible, repay losses; victims are consulting lawyers and pushing for open records.
