manipulation

According to DefiLlama data, as of October 21, 2026, the DeFi sector has recorded 43 price manipulation attacks, surpassing the previous annual record of 27 in 2022.The total related losses amount to approximately $199 million, lower than the loss scale of some years, with the Tectonic case alone accounting for about $124.5 million. Among the remaining 42 cases, 32 had individual losses of less than $1 million.

Papertrade's official response to the allegations of price manipulation and the existence of obvious loopholes in the protocol states: It has never been possible for small orders to have the same priority as large orders. If this were done, the front end would suffer from congestion due to junk trading, and the consequences would be much worse than the existing queuing mechanism.Under these constraints, we have designed the fair launch to be as inclusive as possible.Last night, the attempts to manipulate BTC/ETH on Hyperliquid BBO were not due to flaws in the mechanism that took six months to design. These situations had already been considered; it was only because the position limits were set very loosely in the early stages to cope with congestion that such occurrences were possible. If position limits were set during peak demand for launching, it would only exacerbate the slow experience, and the queuing mechanism itself, due to the uncertainty of opening/closing confirmation times, naturally provides protection against manipulation.As congestion eases, we have begun to tighten position limits on-chain and at the relay level. In such a system, manipulation attacks are always possible— the key is whether the attempt is economically viable. The official goal is to set parameters to a point where it is almost never profitable; even if successful, the tail risk is extremely high, and the expected value is negative.

Crypto trader Rune stated on platform X that the official documentation of PaperTrade has disclosed a "vulnerability" risk in the pricing mechanism at the protocol level. According to the screenshots of the displayed documentation, attackers can manipulate prices using the Best Bid and Offer (BBO) from the Hyperliquid order book. This risk involves unresolved price manipulation pathways, contract economic mechanisms, risk exposure control, as well as operational protective measures and permission management mechanisms.In addition, Rune also forwarded a tweet from community user boblob, which revealed that two wallets are suspected of actively exploiting "attacks" on the PaperTrade platform, causing a slight fluctuation of about 10-20 basis points in the ETH price on the Hyperliquid platform through trades totaling approximately 20 million dollars. Boblob further added that there are obvious issues with the current PaperTrade protocol that need to be fixed as soon as possible, or it may affect the long-term sustainability of the protocol.

The U.S. Commodity Futures Trading Commission (CFTC) market regulatory department announced that prediction contracts based on whether specific individuals mention certain words or attend events face a high risk of market manipulation and can only be launched on designated contract markets under limited circumstances.CFTC recommends that relevant platforms assess whether individuals who can influence contract outcomes are bound by legal, professional, contractual, fiduciary, or confidentiality obligations, and take proactive trading rules and risk control measures to prevent manipulation.

IcoBeast.eth, the head of Kalshi's cryptocurrency business, posted a statement addressing external concerns regarding Kalshi's cryptocurrency prediction market trading volume fraud and self-clearing members (SCM) of perpetual contracts. He stated that the Artemis chart shows the proportion of prediction market trading volume, not the trading volume of perpetual contracts; Kalshi will not provide rebates for the cryptocurrency prediction market, and the calculation method for the number of contracts and notional amounts in the prediction market is consistent with other prediction markets, thus making it comparable.Regarding the claim that "SCM is a market maker selected by Kalshi," he stated that this is not true. Any institution that meets regulatory requirements can become a self-clearing member of a CFTC-regulated exchange, and "fair access" is also one of the regulatory requirements. He also mentioned that all exchanges improve liquidity through rebates and incentive programs, including CME, Hyperliquid, and Binance. As for Kalshi's perpetual contract business, he acknowledged that it is still in the early stages but stated that unlike offshore perpetual contract trading platforms, Kalshi needs to publicly disclose incentive programs, so the relevant incentive arrangements can be publicly viewed.

According to PeckShieldAlert, the lending market of Nostra on Starknet was manipulated due to the NSTR oracle price, with a single account borrowing approximately 3.5 million dollars worth of ETH, STRK, USDC, USDT, WBTC, and DAI using NSTR as collateral.The attacker has since cross-chained approximately 1.92 million dollars worth of assets to Ethereum, including 234.57 ETH and 1.3 million DAI.

According to SlowMist monitoring, the BSC chain project BeatXswap suffered a price manipulation attack, resulting in a loss of approximately 2.985 million BTX (about $77,500).The attacker borrowed 6 million BTX through a flash loan and sold it into the Uniswap V3 pool to lower the price. They then exploited a vulnerability in the contract that used only the V3 pool's instant price as the sole pricing basis (without TWAP protection and without deviation limits), depositing USDT in two transactions to trigger liquidity mining and withdrew BTX from the LP position.

According to News.bitcoin, the Financial Supervisory Service of South Korea has launched a real-time artificial intelligence platform to detect cryptocurrency price manipulation. One of the core functions of this system is its ability to identify short-term price manipulation by referencing a historical database of known market abuse strategies.The Financial Supervisory Service of South Korea will next expand this system to track cross-exchange capital flows and on-chain blockchain activities.

The U.S. Department of Justice (DOJ) announced that Liu Zhou, the founder and principal operator of the cryptocurrency financial services company MyTrade, was recently fined $10,000 in federal court in Boston for participating in a cryptocurrency market manipulation scheme.Prosecutors stated that MyTrade provided so-called "Volume Support" services to cryptocurrency projects through its "MyTrade MM" platform, using bots to execute false trades (wash trading) across multiple cryptocurrency exchanges, artificially creating trading volume and market activity to mislead investors. According to the plea agreement, MyTrade MM has ceased providing "Volume Support" services and permanently shut down the related wash trading bots, while adding a statement on its website acknowledging that "Volume Support constitutes wash trading, which is illegal under U.S. law." The U.S. Department of Justice stated that the case was jointly pursued by the U.S. Attorney's Office and the Boston division of the Federal Bureau of Investigation (FBI).

According to monitoring by Chainalysis, yesterday Hexagate detected that the LpdFi protocol was attacked, resulting in a loss of approximately $700,000. The attacker borrowed about $44 million in a flash loan, artificially inflated the price of LPD tokens by 71 times on the DEX, and then used tokens worth only about $2 million to fake a deposit of approximately $140 million in the protocol.One second later (just crossing the daily interest settlement boundary of the protocol), the attacker collected the interest for the inflated position for an entire day, triggering the protocol to liquidate its entire liquidity pool and pay out the stolen funds. After repaying all loans, the attacker made a profit of about $700,000 and immediately transferred the funds through Relay and TornadoCash.

On the day BitMEX announced its shutdown, BKX Services Inc. and David Namdar filed a class action lawsuit in the Southern District of New York Federal Court, accusing the platform of manipulating user forced liquidations and stealing Bitcoin collateral by using insider trading privileges and server freezing tactics. The plaintiffs claim a total loss of approximately 623 BTC, with BKX losing at least 305.81 BTC and Namdar losing over 316.85 BTC, seeking the return of Bitcoin and damages.The complaint states that BitMEX allowed clients to use up to 100 times leverage, while forcibly liquidating positions when the collateral value was still about twice the loss, with the remaining Bitcoin being included in the platform's insurance fund, allowing BitMEX to profit from it. This lawsuit traces back to relevant transactions starting from July 23, 2018, while a similar case from 2020 was voluntarily withdrawn on June 30, 2025.

According to South Korean media KBS, the Financial Services Commission of South Korea has announced the results of virtual asset market regulation. Since the implementation of the "Virtual Asset User Protection Act" two years ago, approximately 40 investigations into unfair virtual asset trading have been completed, and more than 30 cases have been reported or notified to judicial authorities, focusing on cracking down on market disorder behaviors such as short-term manipulation and "pump and dump."In the future, the ability to monitor the market will be further strengthened, and an AI-based virtual asset regulatory system will be established, including real-time market monitoring, second-level price manipulation analysis, and automatic identification of suspicious accounts and trading intervals.

According to Bloomberg, researchers at Stanford University have found signs of manipulation in the Polymarket five-minute Bitcoin betting market. The study analyzed contract data over approximately two months and discovered repeated one-way trading pulses on the Binance exchange that briefly affected Bitcoin prices just seconds before the betting ended, benefiting those with aligned positions. The researchers referred to this pattern as "temporary manipulation to drive up spot prices" and pointed out that such contracts have structural vulnerabilities—participants can influence the outcome by trading the underlying asset itself that determines win or loss.A Polymarket spokesperson stated that the platform uses multiple independent price oracles to ensure accuracy and plans to transition some markets to a settlement method using longer time windows next year to enhance market integrity. The study estimates that suspected manipulators profited about $8.2 million over two months, primarily from losses incurred by retail traders. Similar patterns are not evident in the 15-minute market, where longer time windows make it more difficult to influence outcomes.

According to TenArmorAlert monitoring, the BSC chain contract VECAndETH suffered a suspicious price manipulation attack, resulting in a loss of approximately $109,600.

On-chain detective ZachXBT updated on X that an entity initially funded by the LAB team deposited 18.4 million LAB into Aster, approximately 18.3 million USD, and sold it on the DEX spot market, causing the LAB price to drop again by 54%, from 1.2 USD to 0.55 USD.ZachXBT stated that this entity transferred LAB to 3 Aster deposit addresses between July 10 and 11, and currently holds about 81.5 million LAB. He added that the entity received over 196 million LAB from the LAB team in April 2026, subsequently transferred to a Bitget address, and withdrew from Bitget to 10 addresses between May 11 and 12.ZachXBT has previously questioned the existence of market manipulation and insider supply issues with LAB, claiming that one of the multi-signers from the LAB team had financial ties to addresses related to RIVER manipulation, and pointed out that nearly 226 million LAB was deposited into Bitget between March and April.

According to the Daily Economy, the South Korean Financial Commission held its 12th regular meeting and filed lawsuits regarding two cases of market manipulation in the cryptocurrency asset market.In the first case, "whale" investors used tens of billions of Korean won to acquire about half of the global circulation of a certain cryptocurrency asset, artificially inflating the price on overseas exchanges, and then profiting from arbitrage on domestic exchanges by taking advantage of the price linkage effect between exchanges, with the losses borne by domestic investors.In the second case, the suspects targeted "Kimchi Coin" by repeatedly submitting market buy and sell orders through API channels within one second, creating a false appearance of active trading, while simultaneously posting high-priced buy orders on the web to drive up the market. After buy orders surged in, they sold off in batches to cash out.The Financial Commission warns investors to be cautious of cryptocurrencies with sudden and unjustified spikes in price and trading volume, and stated that it will strengthen the disclosure mechanism for large holders' positions and the market warning system.

PiggyBank released a detailed report on the LAB incident on June 6, stating that the protocol experienced a net withdrawal of approximately $579,000 on June 6, primarily due to a LAB token basis trade being manipulated by the market.In early May, PiggyBank purchased 142,800 locked LAB tokens (approximately $102,500) through an OTC intermediary while simultaneously opening a perpetual contract short hedge. However, market participants continuously maintained the spot price above the perpetual contract price, resulting in a deeply negative funding rate (annualized -17,000%), and the high hedging costs forced the shorts to close, resulting in a loss of approximately $476,000. The currently locked LAB tokens have a spot value of about $1 million, but due to poor liquidity and lack of hedging, they have been excluded from the NAV calculation.PiggyBank will undergo structural reforms: increasing transparency of on-chain mechanisms, strategy logic, and fund allocation will be publicly verifiable, while basis trading and funding rate arbitrage will be gradually phased out. In terms of compensation, affected users will receive USDC compensation based on actual losses, with funding sources including NAV discrepancies, future LAB sales (expected to unlock from August 14 to October 14, currently valued at approximately $1 million), and 50% of future platform revenue. All users recorded in the snapshot on June 6 are eligible for compensation.

According to informed sources, the CFTC is proposing a comprehensive set of new rules to regulate prediction markets. The parameters of these rules will continue to allow most sports-related betting while striving to avoid obvious manipulation.According to a draft of the proposed rules seen by The Wall Street Journal, the U.S. CFTC will introduce new regulations on Wednesday, seeking to prevent predictive bets that it believes are not in the public interest or are easily manipulable, such as in cases where one person may have an undue influence on the outcome.The agency's proposal does not directly prohibit trading any specific type of so-called event contracts but outlines the factors under which regulators will review certain types of contracts on a case-by-case basis.The U.S. CFTC has previously provided some preliminary guidance on which types of bets should be avoided, and Kalshi and other prediction platforms have taken action in advance.Additionally, informed sources revealed that the CFTC is considering other rules, including those aimed at protecting retail traders.

edgeX released an update regarding the abnormal price fluctuations of the EDGE token, stating that the protocol has not been compromised in any way, and this incident is not a hacker attack, exploit, or security vulnerability.Current confirmed information indicates that this is an attempt by certain external parties to deliberately manipulate the market price of EDGE, which is a matter of market integrity rather than platform security. The team is actively investigating and collaborating with relevant exchanges and platforms, and a comprehensive update will be released after the investigation is complete.