Hyperliquid bridge temporarily suspends USDC withdrawals

JH Kim

Summary

Hyperliquid bridge has temporarily suspended USDC withdrawals.
Withdrawals of other assets and the deposit functionality are being maintained normally.
The measure is said to be related to a 4.9 million dollar loss caused by the POPCAT incident.

The crypto asset (cryptocurrency) bridge protocol Hyperliquid (HYPE) has temporarily suspended USDC withdrawals.

On the 12th (local time), according to the crypto-focused media outlet U.Today, the Hyperliquid bridge has not been processing USDC withdrawal requests since around 1 a.m. local time. However, assets other than USDC can be withdrawn normally, and deposit functionality remains operational.

This measure is analyzed as a consequence of the earlier 'POPCAT incident'.

According to the outlet, a user withdrew 3 million dollars worth of USDC from OKX, then opened a long position on the meme coin POPCAT on Hyperliquid and artificially supported the price. The long position later expanded to 30 million dollars, but when the buy wall was removed the price plunged.

As the liquidation size became excessively large, Hyperliquid's liquidity pool (HLP), which acts as a market maker, absorbed the position and ultimately recorded a loss of 4.9 million dollars before closing the position.