Blockchain investigator ZachXBT (real name Zachary Star) posted a detailed tweet on May 28, 2025, accusing James Wynn, a well-known high-risk trader at the derivatives platform Hyperliquid, of hypocritical behavior and fraudulent market manipulation. This exposure has caused a stir in the crypto trading circle, revealing possible unethical practices in the high-leverage trading sector.
The key accusations against James Wynn
Pretending to be retail investors but colluding with institutions for trading
ZachXBT said that Wynn has long been creating the image of a “humble retail trader” on social media, sharing her personal trading stories. However, leaked information and on-chain data show that she communicates directly with the institutional sales team of Hyperliquid and collaborates with large investors for trading. For example:
A screenshot from the telegram group shows Wynn discussing a $20 million short position in SOL with Hyperliquid executives, asking, “Liquidity when a sell-off is needed – can we position the order book in advance?”
On-chain analysis indicates that Wynn’s Trading address frequently interacts with wallets related to Jump Trading and Alameda Research, suggesting that there is institutional support behind it.
Manipulate social media to exaggerate trading performance
ZachXBT accused Wynn of beautifying the trading reputation through fraudulent means:
Selective sharing of profits: Wynn often posts screenshots of huge profits (such as a profit of 3.2 million US dollars from Bitcoin trading), but has never disclosed a loss of 4.8 million US dollars during the same period. The internal trading logs obtained by ZachXBT confirm this gap.
Pre-positioning and selling off: Trading data shows that Wynn often builds positions a few minutes before promoting assets on Twitter. For instance, he bought 50,000 PEPE tokens at $0.00012, then tweeted that “PEPE will be the next big meme coin”, and after the price soared by 200%, he sold it for a profit of $1.1 million.
Make profits by exploiting platform loopholes
ZachXBT pointed out that Wynn was suspected of manipulating the Hyperliquid order book:
Washing transactions: Analysis shows that Wynn’s address carried out over 1,200 washing transactions (buying and selling the same asset to create false trading volume) on Hyperliquid, violating the platform’s terms of service.
Liquidity pumping: During periods of intense market volatility, Wynn is suspected of colluding with market makers to inject false liquidity, triggering stop-loss orders from retail investors. For instance, on April 15, 2025, he and two other addresses injected 15 million US dollars of false buy orders into the ETH market. After a brief price surge, they withdrew the liquidity, resulting in a 7 million US dollar margin call for retail investors.
Hyperliquid’s response and community backlash
Platform Statement: Hyperliquid issued a brief response saying it is “investigating the allegations” and emphasized zero tolerance for market manipulation, but did not comment further on the Wynn case.
Traders’ reaction: The crypto community expressed anger, with over 25,000 people signing a petition on Change.org, demanding that Hyperliquid take action.
Institutional chain reaction: Several crypto funds that previously collaborated with Wynn have distanced themselves from him. Galaxy Digital stated, “All partnerships with James Wynn will be terminated until the investigation results are out.”
Wynn’s defense and legal risks
Denying the accusation: Wynn claimed on Twitter that ZachXBT’s report was a “competitively funded attack”, stating that “all transactions were legal and transparent, and Zach took things out of context to smear me.”
Potential legal consequences: If the accusations are true, Wynn’s actions may violate multiple laws, including:
Securities fraud: Manipulating prices through false statements may violate Section 10 (b) of the Securities Exchange Act.
Commodity fraud: Washout trading and order manipulation may violate the Commodity Exchange Act.
Breach of platform service terms: Violation of the Hyperliquid User Agreement may lead to civil litigation.
Legal experts point out that although crypto regulation is still evolving, the CFTC has intensified its enforcement of similar manipulations. In 2024, it fined a market washer $7.5 million.
The profound impact on the ethics of crypto transactions
The exposure of ZachXBT has reignited the ethical discussion on crypto trading:
The trust crisis of influencers: The case highlights the risks of blindly trusting “trading masters”, and their qualifications need to be verified.
Platform responsibility: Critics argue that exchanges like Hyperliquid need to enhance their monitoring tools, such as real-time order book analysis and transaction monitoring.
Retail investor protection: Advocacy groups call for clear trading disclosure guidelines and require mandatory reporting of large positions and conflicts of interest.
As the investigation unfolds, the crypto community will closely monitor whether Hyperliquid and regulatory authorities take decisive action to set a precedent for accountability in high-risk digital asset trading.
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