Chapeng Zhao, alias CZ, Binance’s founder and former CEO, has been accused of the Hyperliquid attack, which drained $5 million from the liquidity pool. However, the billionaire said that he was not involved and has no ties with the exchange.
After an unknown whale caused chaos on Hyperliquid, the crypto community did not see it as a random liquidation but a deliberate stress test or attack aimed at destabilizing Hyperliquid’s liquidity system. To that end, the community pointed at CZ.
However, he responded to the speculation saying, “Glad to know I live rent free in your head […] but I have not used any other CEX for 8 years.”
Still, the community is not buying it. One of the X users said that he could have instructed someone else to manipulate the market on his behalf. Another wrote, “He denies everything. lol. Look no further than his last week’s interview. He denied no business dealing with WLFI even after a clear business deal in place with WFLI on USD1. Denying the truth is no big deal for this dude.”
Crypto community urge to move funds from Hyperliquid
As a result of the attack, the crypto community has begun to urge each other to withdraw their funds from Hyperliquid. According to them, this is not the first incident on Hyperliquid this year, raising new questions about how the exchange handles liquidity concentration and systemic risk.
One user said, “Only $5M and they’ve had to stop withdrawals […] The hyperfags are in full panic mode.”
Last month, Hyperliquid experienced the highest dollar-value trades liquidated during a 24-hour selloff, totaling $10 billion, although it’s smaller than its competitor, Binance. The exchange struggled with low liquidity and prolonged liquidation times.
The panic selling overwhelmed Hyperliquid’s order books, which were designed for fast and high-volume perpetual trading on its Layer 1 chain. Meanwhile, Dune data shows Binance dominates spot volume. However, Hyperliquid’s share remains under 10% despite steady growth through mid-2025.
POPCAT crashes over 20% in hours after the attack
As reported by Cryptopolitan, a whale withdrew $3M USDC from OKX and split the funds across 19 wallets on Hyperliquid. He started opening massive long positions on POPCAT. To create the illusion of strong demand, he placed a huge buy wall at $0.21, with $30 million worth of orders sitting on the book.
However, without warning, the wall was removed. The price instantly collapsed. This resulted in long liquidations for their own position and all other traders. The trader lost his $3M collateral, and Hyperliquid’s HLP system automatically absorbed the open positions.
This resulted in an additional $4.9 million loss to HLP and triggered a deeper selloff across the token.
Previously, POPCAT has been experiencing long-term declines, characterized by extended periods of low trading activity. However, yesterday POPCAT saw its volumes rise by 10X, up to $230M. The price of the token has declined by 25% in the last 24 hours. The token is trading at $0.1244.
CZ to debate Peter Schiff on Bitcoin vs tokenized gold
While the attack on CZ and Binance ensues, the exchange has revealed a debate between Zhao and Peter Schiff, a gold advocate and economist. It will happen on December 4 as part of Binance Blockchain Week 2025, which will run from December 3 to 4 at the Coca-Cola Arena in Dubai.
The debate will focus on Bitcoin vs. tokenized gold. The two bulls, one in gold and one in crypto, will separately give their reasons for supporting their respective assets.
This argument began on X, where CZ voiced worries about Peter Schiff’s idea for tokenized gold. He pointed out that it would depend on third-party administrators and called it a “trust me bro” token.
Peter Schiff replied by challenging CZ to a discussion about Bitcoin vs. tokenized gold to learn more about their different points of view. CZ said yes to the offer and suggested that Binance Blockchain Week take place in Dubai.
