Hyperliquid Hit by $4 Million Trade, Bybit CEO Calls for Risk Adjustments

According to a post on X by blockchain security firm Three Sigma, a trader used 50x leverage to turn a $10 million stake into a $270 million Ethereum position.

They withdrew collateral, shifting the risk to Hyperliquid’s liquidity pool, which ended up covering the loss. The trader walked away with a $1.8 million profit.

Did you know?

Want to get smarter & wealthier with crypto?

Subscribe - We publish new crypto explainer videos every week!

How Can You Earn Money With Axie Infinity? (AXS Animated Explainer)

SUBSCRIBE

ON YOUTUBE

In response, Hyperliquid reduced its maximum leverage—Bitcoin BTC $80,505.56 was capped at 40x, and Ethereum ETH $1,846.41 at 25x. The platform explained that higher margin requirements would provide a better safety net for handling large liquidations.

Bybit $2.34B CEO Ben Zhou commented in a post on X, pointing out that centralized exchanges (CEXs) face the same risks when handling large liquidations.

He explained that when a whale’s position is liquidated, Bybit’s liquidation engine takes over. While reducing leverage is one way to manage risk, he acknowledged it could make the platform less attractive to traders.

Zhou suggested a more flexible system where leverage decreases as a trader’s position grows. On a centralized exchange, he explained, a position as large as the one on Hyperliquid would have its leverage reduced to around 1.5x.

Still, he admitted that determined traders could bypass restrictions by using multiple accounts.

Meanwhile, Garantex, a Russia-based crypto exchange, recently halted all services and put its website under maintenance. What happened? Read the full story.