Clarification on Insider Trading Claims: Hyperliquid Labs Responds

Hyperliquid Labs has issued a statement addressing recent accusations of insider trading regarding their token HYPE, clarifying that these allegations stem from a former employee. The organization emphasized that both team members and contractors are strictly forbidden from engaging in leveraged trading involving HYPE tokens, with violations resulting in immediate termination. This policy was put in place to ensure that the team remains fully committed to the long-term sustainability of their ecosystem.

Key Takeaways

Hyperliquid Labs has rebutted claims of insider trading linked to HYPE, blaming a former employee.
The organization has implemented a strict no-leverage trading policy for its team to foster community trust.
The HYPE token is facing significant market challenges, including monthly unlocks and general market corrections.
Automated buybacks have resulted in 11% of HYPE tokens being removed from circulation, contributing to potential long-term deflation.
Speculative interest in HYPE has fallen by 50% in late 2025, impacting market sentiment.

‘Team isn’t shorting HYPE’ - Hyperliquid Labs clarifies insider trading claims

Hyperliquid HYPE

Can Token Burns Enhance Market Sentiment?

The HYPE token is currently facing dual pressures from a wider market downturn and ongoing monthly token unlocks scheduled to continue until late 2027. One of the notable actions taken by the project includes automated buybacks funded by generated fees. To date, Hyperliquid Labs has successfully purchased 27.4 million HYPE tokens, equating to 11% of the circulating supply.

Following a recent proposal approved by validators, all acquired tokens and future buybacks will undergo burning. As a result, 11% of the total supply, valued at approximately $942 million HYPE, has been permanently removed from the market, strengthening the potential for long-term deflation of the token.

Hyperliquid HYPE

Decline in Speculative Interest

Despite these measures, speculative interest in HYPE has dropped by 50% in late 2025, plummeting from over $2 billion to about $1 billion, as indicated by Open Interest statistics. This decline reflects a bearish sentiment in the market during the fourth quarter of 2025, which may limit the potential for a significant rebound in the near future.

Hyperliquid HYPE

However, following the approval of the token burn proposal, there has been a slight recovery, with HYPE increasing by 4% over the past 24 hours and approaching the $25 mark. A more robust bullish reversal will likely require reclaiming the $28 threshold decisively.

Hyperliquid HYPE

Analysts' Observations on Price Trends

Despite the slow recovery, analysts have noted that HYPE may rebound from recent losses, referencing similar past price behaviors around the average buyback cost. The last instance when the price approached the average buyback price of around $13 in Q1 2025 led to a swift increase in momentum. Currently, the token's price correction is again touching this critical average cost basis.

HYPE

Overall, a broader reset in market sentiment could accelerate a bullish recovery. Nonetheless, if Bitcoin experiences further losses, this may restrict upside potential as monthly unlocks approach.

Conclusion

In summary, Hyperliquid Labs is proactively addressing concerns regarding insider trading, while navigating complex market dynamics with their token HYPE. The team's commitment to transparency and a long-term approach may play a crucial role in restoring investor confidence as the market stabilizes.