A ‘Brutal’ Lesson

Plus, 📉 More crypto ETFs caught up in delays, 💥 Venice airdrop tokens burn, and 💰 FTX keeps moving unstaked SOL.

Author

Juan Aranovich
March 13, 2025

Hi! In today’s edition:

  • 💥 Hyperliquid: Raw deal 

  • 🔥 Venice’s token bonfire

  • ⏳ Crypto ETFs: More holdups  

  • 🤔 FTX’s SOL train

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By Tikta

Decentralized perpetual exchange Hyperliquid lost $4 million from its liquidity provider vault after a whale opened a highly leveraged long position on ETH.

Using 50x leverage, the whale turned $10 million USDC to a $271 million ETH long.

The whale managed to secure a profit of about $1.8 million from the trade by withdrawing collateral to lower their margin below maintenance level. That triggered the liquidation of the position and forced Hyperliquid to take the other side of the trade, which ultimately ended up being a $286 million ETH long. 

“$4M gone. No bug. No exploit. Just a brutal game of liquidity mechanics,” said smart contract auditor Three Sigma on X. 

Hyperliquid clarified that the incident was not due to an exploit or a hack but rather a high-risk trading strategy.

“HLP's all-time PNL remains at ~$60M. As a reminder, HLP is not a risk-free strategy,” Hyperliquid’s team said.

The protocol now intends to update the maximum leverage for BTC and ETH to 40x and 25x, respectively, to “better buffer for backstop liquidations.”

$100M of Unclaimed Venice Airdrop Tokens Burned

The Venice airdrop has concluded, resulting in approximately $100 million worth of unclaimed VVV tokens being permanently burned on Wednesday, which marked the end of a 45-day claim window that opened up in January.

The privacy-focused AI ecosystem, built on the Base network, initially allocated 50% of its total 100 million token supply for the airdrop.

Over 17.4 million VVV tokens were claimed by more than 40,000 people. The team received 2.5% of the token supply at launch and sold 1% of it at the time, drawing criticism from the community. 

Now, the team says it’s bought back that 1% of VVV and burned the tokens, too, in order to “resolve any lingering doubts.”

It’s worth noting that unlike most other native tokens, VVV is not a governance token. 

Venice founder Erik Voorhees, who is also a well-known Bitcoin advocate, emphasized that VVV’s utility is in the access it provides to Venice’s API, meaning that users and AI agents won’t have to pay for inference services.

VVV rose 9.8% in the 24 hours to 6:15 a.m. ET on Thursday to trade at $3.56.

SEC Delays ETF Decisions for DOGE, SOL, LTC and XRP

The U.S. Securities and Exchange Commission has delayed decisions on whether or not to approve several more altcoin exchange-traded fund applications, including filings for Dogecoin (DOGE), Solana (SOL), and Litecoin (LTC) ETFs.

The SEC’s move adds to delayed decisions on four XRP ETF applications filed by Grayscale, 21Shares, Bitwise, and Canary reported by Unchained yesterday.

The review period for the ETFs has for now been extended to May, but final deadlines could potentially stretch all the way to October.

The delays come as the Senate has yet to confirm Paul Atkins as the new SEC chair under President Donald Trump.

Despite the delays, industry watchers such as Bloomberg analyst James Seyffart maintain that the odds of approval for the ETFs this year remain relatively high.

“It's expected as this is standard procedure & Atkins hasn't even been confirmed yet,” Seyffart said on X.

FTX-, Alameda-Linked Wallets Unstake $23M SOL

Blockchain wallets tied to collapsed crypto exchange FTX and its sister company Alameda Research unstaked $23 million worth of Solana (SOL) tokens and distributed them to 38 new FTX-linked addresses.

The transactions were flagged on Wednesday by blockchain analytics firm Arkham, which noted that the addresses still held $178 million of SOL.

Earlier this month, Alameda unstaked 3.03 million SOL tokens valued at around $431 million at the time.  Since November 2023, the two entities have unstaked a total of 7.83 million SOL tokens worth some $986 million.

The unstaking activity, which typically takes place between the 12th and 15th of each month, coincides with FTX’s creditor repayment process, which began on Feb. 18. 

The price of SOL has been tracking lower in recent weeks, dropping 37% over the past month. SOL was trading at $127.16 as of 6:15 a.m. ET on Thursday.

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  • 💸 LIBRA co-creator Hayden Davis allegedly withdrew $1.6 million from crypto platforms last week, funds that investigators have linked to alleged insider trading and fraud involving Argentina’s LIBRA token collapse.

  • 🔴 Meanwhile, Argentinian lawyer Gregorio Dalbon formally requested an Interpol Red Notice to detain Davis, alleging that he played a central role in the LIBRA crash that wiped out millions of dollars of investors’ funds.

  • ⚠️ A crypto trader lost $733,000 in a suspected sandwich attack on Uniswap V3 on Wednesday, prompting speculation that the unusual sequence of transactions may have been part of a money-laundering scheme.

  • 📉 Jupiter DAO this week approved a $140 million compensation package for new hires, funded through a personal token allocation by its pseudonymous creator, Meow, sparking a backlash from investors as the project’s token slumped to an all-time low.

  • ⚡ Solana-based Zeta Markets launched the testnet for Bullet, a high-speed network extension aiming to rival Hyperliquid by reducing transaction latency to 2ms and expanding into lending and spot trading.

  • 💳 Ripple secured a Dubai Financial Services Authority license to offer regulated crypto payments in the UAE, expanding its footprint in the Middle East, where 20% of its customers are based.

  • 🚀 Binance secured a $2 billion investment from Abu Dhabi-based MGX in its first institutional funding round, granting MGX a minority stake as both firms aim to advance artificial intelligence, blockchain, and financial innovation.

  • 💰 Strobe Ventures, spun out from BlockTower Capital, launched with $235 million of assets under management and plans to raise a $100 million second fund, focusing on early-stage crypto investments with a contrarian approach.

  • 📹 Video-sharing platform Rumble expanded its bitcoin treasury by purchasing 188 BTC for $17.1 million at an average price of $91,000 per coin, following a $775 million investment by Tether last year.