Decentralized derivatives exchange Hyperliquid is facing scrutiny after market surveillance firm Solidus Labs identified more than $170 million in unusual orders involving oil-linked perpetual futures, raising concerns about potential market manipulation through spoofing.
According to an October 28 Bloomberg investigation, the suspicious activity occurred between March 8 and March 10, 2026, when international oil prices experienced sharp fluctuations amid geopolitical tensions involving Iran.
Solidus Labs identified two trading accounts that repeatedly placed substantial orders on one side of Hyperliquid’s order book before cancelling them while executing transactions in the opposite direction. The surveillance firm estimated that the accounts generated approximately $119,000 in profits over the three-day period.
The activity primarily involved Brent crude perpetual futures, although similar patterns were identified in contracts tracking West Texas Intermediate crude oil and natural gas.
Importantly, the $170 million figure represents the value of unusual orders submitted rather than completed trading volume or confirmed financial losses.
Large order cancellations suggest potential market manipulation
Spoofing involves submitting orders without intending to execute them, typically to create a misleading impression of market demand or supply and influence prices before completing trades in the opposite direction.
Solidus found that the value of cancelled orders was approximately 30 times the value of executed transactions on the opposing side of the market.
In one March 9 example, the trader reportedly cancelled approximately $17 million in sell orders while executing roughly $425,000 in purchases. Brent crude perpetual prices moved noticeably around the cancellations, according to the investigation.
Such activity can artificially suggest substantial selling pressure, potentially encouraging other market participants to lower their offers before the trader purchases contracts at more favourable prices.
However, Solidus acknowledged that the observed trading patterns alone do not conclusively establish manipulative intent. Legitimate market-making strategies can also involve frequent order cancellations, particularly during periods of heightened volatility.
The trader’s identity has not been established, and the findings do not constitute a regulatory determination that spoofing occurred.
Hyperliquid Labs responded by emphasizing that orders, cancellations and completed transactions are publicly recorded onchain, allowing market participants, surveillance providers and regulators to independently examine trading behaviour.
Trade.xyz, associated with the relevant commodity derivatives markets, reportedly highlighted existing order limits and continuous monitoring arrangements.
Commodity perpetuals face growing regulatory scrutiny
The findings arrive as decentralized derivatives platforms expand beyond cryptocurrencies into traditional financial instruments, including commodities, equities and stock indices.
Hyperliquid’s HIP-3 framework allows independent deployers to introduce perpetual futures markets, with responsibility for contract specifications, pricing mechanisms and operational controls.
Unlike conventional commodity futures, perpetual contracts generally have no fixed expiration date and use periodic funding mechanisms to maintain alignment with reference prices.
The Commodity Futures Trading Commission has previously identified spoofing as prohibited conduct in regulated derivatives markets, although the application of existing rules to decentralized offshore platforms presents additional jurisdictional questions.
In June 2026, the CFTC sought public feedback on perpetual derivatives referencing traditional commodities, reflecting growing regulatory interest in continuously traded energy contracts.
The reported activity highlights a central challenge for decentralized exchanges: public trading records can improve transparency and enable independent surveillance, but they do not automatically prevent potentially abusive market behaviour.
As commodity-linked perpetual markets develop, effective order-book monitoring, enforceable trading rules and clearer regulatory responsibilities are likely to become increasingly important for institutional participation.
