Blockchain analysis firm Arkham has identified over $30 million worth of Bitcoin laundered through Hyperliquid by North Korean hackers over the past three weeks, according to reports. The discovery underscores regulatory concerns as Hyperliquid and the Trump administration pursue efforts to bring the offshore derivatives exchange into U.S. regulatory compliance.
President Donald Trump and the Commodity Futures Trading Commission are working to integrate Hyperliquid within U.S. jurisdiction. The North Korean transfers raise a fundamental question: whether a decentralized venue can operate under American regulation while maintaining the permissionless characteristics that define DeFi platforms.
Previous Concerns and Escalating Activity
Hyperliquid faced similar scrutiny in December 2024 regarding wallets associated with North Korean parties. The exchange stated at that time that no hacking or user fund theft had occurred. The latest transfers indicate the pattern continues even as Hyperliquid gains popularity in the United States.
According to Chainalysis, North Korea stole approximately $2 billion in cryptocurrency in 2025, the regime's most successful year for such theft. Funds are reportedly used to support weapons programs. CertiK reports the regime has stolen approximately $6.75 billion total across 263 incidents since 2016.
U.S. Market Access Through Regulated Intermediary
Rather than acquiring a licensed exchange, Hyperliquid Labs is pursuing a different path. The company is negotiating with Payward, Kraken's parent company, to provide U.S. traders access to Hyperliquid perpetual futures through Bitnomial, a CFTC-regulated clearinghouse owned by Payward.
Payward acquired Bitnomial in May for $550 million, gaining access to its derivatives infrastructure registered with the CFTC, including a Futures Commission Merchant, Designated Contract Market, and Derivatives Clearing Organization. Payward has submitted the arrangement to the CFTC but has not yet received approval.
Bitnomial-registered users would access only a portion of Hyperliquid's perpetual futures offerings, and the Hyperliquid application would remain unavailable to general U.S. users. Specific compliance requirements remain undisclosed.
Commercial Implications
Hyperliquid allocates 99% of protocol fees to its Assistance Fund, which automatically converts trading fees into HYPE tokens. According to the fund's documentation, HYPE is burned, permanently removing it from circulation. An SEC filing indicated that 46.7 million HYPE tokens, representing 4.7% of initial supply, had been acquired and burned as of August 23.
The impact on this token-burning mechanism from volume routed through Bitnomial remains unclear. No details about the commercial agreement between Payward and Hyperliquid have been disclosed. HYPE reached an all-time high of $86.71 on August 27, prior to any U.S. traders using the proposed route.
Regulatory Scrutiny and Political Support
During a White House meeting on August 19, President Trump referred to CFTC Chairman Michael Selig as playing an important role in making Hyperliquid "fully compliant and legal." This comment preceded a 17% spike in HYPE's price. CME Group and ICE also participated in the meeting but have reportedly urged regulators to investigate Hyperliquid for price manipulation and sanctions exposure.
The central regulatory challenge involves customer verification, market surveillance, and sanctions screening—mechanisms that DeFi platforms typically minimize by design. Arkham's findings illustrate the scale of compliance needed.
Bitwise launched its spot Hyperliquid ETF, BHYP, on May 14, trading on NYSE Arca with Anchorage Digital Banking as custodian.
Outstanding Questions
Blockchain movements alone do not establish who controlled receiving exchange accounts or whether exchanges were aware of the North Korean connection. Public blockchain data cannot reveal all compliance actions taken after assets reach centralized exchanges. Hyperliquid has not publicly explained how its architecture screens or blocks wallets identified as Lazarus-linked.
No final registration terms, timeline, or product-specific compliance framework has been made public. Regulatory approval remains pending. Until the CFTC acts, U.S. onshoring remains a proposal, and the recent North Korean transfers remain a stark reminder of the enforcement challenges regulators would assume.
