On May 28, 2025, blockchain investigator ZachXBT (real name Zachary Star) released a detailed thread alleging that James Wynn, a prominent high – risk trader on the derivatives platform Hyperliquid, has engaged in hypocritical behavior and deceptive tactics to manipulate market perception. The expose has sent shockwaves through the crypto trading community, shedding light on potential unethical practices in high – leverage trading circles.
Key Allegations Against James Wynn
1. Pretending to Be a Retail Trader While Coordinating with Institutions
ZachXBT claims Wynn has long presented himself as a “humble retail trader” on social media, sharing personal trading stories and portraying an everyman image. However, leaked messages and transaction data show he has direct communication channels with Hyperliquid’s institutional sales team and has coordinated trades with large – scale investors. For example:
A screenshot from a Telegram group shows Wynn discussing a $20 million short position in Solana (SOL) with a Hyperliquid executive, stating, “Need liquidity on the dump—can you prime the order book?”
Chain analysis reveals that Wynn’s trading address frequently interacts with wallets associated with Jump Trading and Alameda Research, suggesting institutional backing.
2. Manipulating Social Media to Inflate Trading Performance
ZachXBT alleges Wynn has used deceptive tactics to inflate his trading reputation:
Selective Screenshots: Wynn often posts screenshots of massive profits (e.g., a $3.2 million gain on a Bitcoin trade) but rarely shares losses. ZachXBT obtained internal trading logs showing Wynn suffered $4.8 million in losses over the same period, which were never disclosed.
Front – Running and Pump – and – Dump Schemes: Transaction data shows Wynn frequently enters positions minutes before promoting assets on Twitter. For instance, he bought 50,000 PEPE tokens at $0.00012, then tweeted, “PEPE is the next big memecoin—mark my words,” causing the price to surge 200% before he sold for a $1.1 million profit.
3. Exploiting Platform Vulnerabilities for Profit
ZachXBT highlights alleged manipulations of Hyperliquid’s order book:
Wash Trading: Analysis shows Wynn’s addresses have executed over 1,200 wash trades (buying and selling the same asset to create false volume) on Hyperliquid, violating the platform’s terms of service.
Liquidity Pumping: During volatile market moves, Wynn allegedly coordinates with market makers to inject fake liquidity, triggering stop – loss orders from retail traders. For example, on April 15, 2025, he and two other addresses injected $15 million in fake buy orders for ETH, causing prices to spike briefly before withdrawing the liquidity, resulting in $7 million in retail liquidations.
Hyperliquid’s Response and Community Backlash
Platform Statement: Hyperliquid issued a brief response stating it is “investigating the allegations” and “will take appropriate action if violations are confirmed.” The platform emphasized it has zero tolerance for market manipulation but declined to comment further on Wynn’s case.
Trader Reactions: The crypto community has expressed outrage, with many calling for Wynn’s account to be banned and funds returned to affected traders. A petition on Change.org demanding Hyperliquid take action has garnered over 25,000 signatures in 12 hours.
Institutional Fallout: Several crypto funds that previously partnered with Wynn have distanced themselves, with Galaxy Digital stating, “We have terminated all relationships with James Wynn pending the outcome of the investigation.”
Wynn’s Defense and Legal Implications
Denial of Allegations: Wynn took to Twitter to deny the claims, calling ZachXBT’s report “a hit piece funded by my competitors.” He stated, “All trades are legal and transparent—Zach is cherry – picking data to smear my name.”
Potential Legal Consequences: If proven true, Wynn’s actions could violate multiple laws, including:
Securities Fraud: Manipulating prices through false statements may violate Section 10(b) of the Securities Exchange Act.
Commodity Fraud: Wash trading and order manipulation could violate the Commodity Exchange Act.
Platform Terms of Service: Violation of Hyperliquid’s user agreement could lead to civil litigation.
Legal experts note that while crypto regulation is still evolving, cases of overt market manipulation are increasingly being pursued by regulators. The CFTC has recently stepped up enforcement against similar tactics, with a 2024 case against a trader for wash trading resulting in a $7.5 million fine.
Broader Implications for Crypto Trading Ethics
ZachXBT’s expose has reignited debates about ethics in crypto trading:
Trust in Influencers: The case highlights risks of trusting self – proclaimed “trading gurus” without verifying their credentials.
