Blockchain analytics firm Arkham reported that North Korean-affiliated hackers have laundered more than $30 million worth of Bitcoin through the offshore derivatives exchange Hyperliquid over the past three weeks. The transactions come as US regulators increase scrutiny of decentralized exchanges amid concerns related to financial crime, sanctions evasion, and regulatory oversight.
Regulatory pressure intensifies on decentralized exchanges
US President Donald Trump and the Commodity Futures Trading Commission (CFTC) are working to establish regulatory authority over offshore derivatives platforms, including Hyperliquid, which has seen rising popularity among US users. Arkham’s findings have reignited debate over whether decentralized venues can be effectively brought under US regulation without undermining DeFi’s core principles of permissionless access and reduced regulatory friction.
In December 2024, Hyperliquid faced similar criticism after blockchain addresses allegedly linked to North Korea were detected moving funds through its platform. Hyperliquid stated that its platform had not been hacked and user assets remained secure. The latest Arkham analysis suggests that North Korean entities continue to utilize Hyperliquid as US regulatory attention grows.
According to research from crypto security companies, North Korea’s regime stole approximately $2 billion in cryptocurrency during 2025, marking its most lucrative year for such attacks, reportedly to finance weapons programs. Cybersecurity firm CertiK says the Democratic People’s Republic of Korea (DPRK) is responsible for $6.75 billion in crypto thefts across 263 incidents since 2016. The Royal United Services Institute has urged tighter controls and enhanced information sharing for virtual asset service providers after outlining how Pyongyang converts stolen crypto to fiat currency for further operations.
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AAPLMini dictionary: Arkham, a blockchain intelligence company that tracks and analyzes on-chain activity linked to illicit actors.
Payward and Hyperliquid eye US entry
Hyperliquid Labs is discussing a US onshore approach through Payward, the parent company of major crypto exchange Kraken. Rather than acquiring an exchange license, the plan would let registered US traders access a limited set of Hyperliquid-related perpetual futures via Bitnomial, a CFTC-regulated clearinghouse owned by Payward. Payward submitted its plan to the CFTC but approval is still pending.
At present, the native Hyperliquid app is inaccessible to US users, and Bitnomial-registered traders would gain exposure only to a fraction of Hyperliquid’s perpetual offering. Specifics regarding regulatory compliance on the joint offering have not been detailed.
| Platform | US User Access | Regulated by CFTC |
|---|---|---|
| Hyperliquid (offshore) | No | No |
| Bitnomial (via Payward) | Limited | Yes |
Earlier this year, Payward completed its $550 million acquisition of Bitnomial, thus gaining a suite of regulated derivatives products: a Futures Commission Merchant, a Designated Contract Market, and a Derivatives Clearing Organization, all registered with the CFTC.
HYPE mechanism and impact for investors
Hyperliquid’s commercial structure revolves around its HYPE token. Ninety-nine percent of protocol fees are dedicated to its Assistance Fund, which automatically converts trading fees into HYPE and permanently removes the tokens by burning them. Hyperliquid documents state that by late August, 46.7 million HYPE, or 4.7% of initial supply, had been removed from circulation.
Currently, it remains unclear if trades routed through Bitnomial would support this ecosystem. Details about the commercial agreement between Payward and Hyperliquid, including licensing fees or revenue-sharing structures, have not been disclosed. The token reached an all-time high of $86.71 on August 27 even before US traders were able to access the platform using the proposed pathway.
Compliance questions and ongoing investigation
During a recent White House meeting, Trump highlighted the CFTC’s role in overseeing Hyperliquid’s compliance efforts, describing Chairman Michael Selig as pivotal in making the exchange “fully compliant and legal.” HYPE’s price climbed nearly 17% following these remarks. Meanwhile, traditional exchanges CME Group and ICE reportedly called for further regulatory scrutiny on Hyperliquid regarding price manipulation and sanctions risks.
Critics emphasize that onshoring decentralized protocols demands effective measures for customer verification, market monitoring, and sanctions screening—areas historically minimized in DeFi platforms. Arkham’s research highlights the scale of illicit activity regulators could face.
Investor confidence continues to grow, with Bitwise recently launching its spot Hyperliquid ETF, BHYP, on NYSE Arca, with Anchorage Digital Banking acting as custodian.
Blockchain records do not clarify who ultimately controls exchange accounts nor whether exchanges are aware of incoming funds’ illicit origins. Hyperliquid has not yet detailed how its technology screens for wallets identified as linked to Lazarus Group, a well-known North Korean cybercrime organization.
Mini dictionary: Lazarus Group, a cybercrime group believed to be sponsored by North Korea, known for state-directed attacks on cryptocurrency platforms.
While Payward has reportedly presented its core structure to the CFTC, final regulatory decisions, registration terms, and product compliance details have not been made public. Until US regulators issue a decision, Hyperliquid’s potential US entry remains uncertain, and the recent North Korean Bitcoin laundering continues to underscore the challenges facing decentralized platforms under global scrutiny.
