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HyperVault Rug Pull Exposed: $4.6M Vanished in DeFi Exit Scam

HyperVault Rug Pull Exposed: $4.6M Vanished in DeFi Exit Scam

Source: HyperVault Rugged

HyperVault, a promised automated yield optimizer on Hyperliquid's HyperEVM network, abruptly vanished with $4.64 million in user funds. Marketed with buzzwords like "modular strategy adapters" and "keeper-bot harvests," the platform concealed a deeply flawed structure behind fancy terms - no share tokens, privileged admin controls disguised as "safety features," and false claims of audits from unrecognized firms.

The Collapse Timeline

  • September 4, 2025: HyperVault announced an audit was starting with security firm Zenith – never completed or made public.
  • September 23-24: Community warning signs emerged, including alerts from Hyperliquid insiders HypingBull and HYPEconomist about shady behavior.
  • September 25: HyperVault drained all nine vaults via a hidden backdoor admin function; millions shifted through deBridge to Ethereum.
  • Following days: Social media accounts deleted, Discord server shut down, website disappeared – the classic exit scam playbook.

Red Flags Ignored

  • Fake audit claims: Zenith confirmed 42 vulnerabilities, 6 high severity, but no public disclosure happened.
  • Opaque ledger system: Unlike standard DeFi protocols issuing ERC-4626 share tokens, HyperVault used an internal tracking system obscuring user holdings.
  • Privileged contract functions: Backdoors masked as “safety” tools allowed mass withdrawals without triggering alarms.
  • Community warnings: Key figures in the Hyperliquid ecosystem flagged concerns weeks earlier, but deposits kept flowing.

The Theft and Laundering

  • Developers moved funds into two primary wallets funded by a "funder" wallet to pay Gas fees.
  • These wallets swapped tokens into HyperVault’s native $HYPE token and batched bridged 1,126.72 ETH (~$4.64M) to Ethereum via deBridge.
  • Funds were further dispersed into four Ethereum wallets, with the majority funneled through Tornado Cash mixers, making recovery virtually impossible.

The Team and Their History

  • The lead figure, Nicholas Olsen ("0xnyck"), disappeared after the scam.
  • Investigations found multiple linked developer emails, all tied to previous scams: ZinoFinance, Zero-G Finance, PerfectSwap, showing a clear repeat pattern.
  • Project domains shared a single anonymous registrar, reinforcing suspicions of a recurring fraudulent operation.
  • Calls for fund returns and a bounty from community trackers received no response.

Collateral Damage and Lessons

  • Innocent parties such as audit firms got caught in tangled transaction webs, highlighting risks of blockchain analysis misinterpretation.
  • Hybra Finance suffered fallout after integrating HyperVault, pledging to compensate victims partially.
  • The incident underscores the limits of due diligence when greed overshadows obvious crypto red flags.

Summary Takeaway

HyperVault’s 95% APY promise was a smokescreen for a rapid, expertly executed exit scam, draining millions while projecting legitimacy through social proof and fake audits.

The team meticulously orchestrated every step - from false transparency theater to final fund extraction - before disappearing with no chance for victims to recover losses.

Warning for all DeFi users: When yield offers defy market logic and audits are unverifiable or incomplete, caution is paramount. Trust must be earned, not assumed.

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