Mirror Tang, founder of security company Salus, said that since March this year, Chinese polices have cracked down on three cases of cryptocurrency money laundering using HyperLiquid. The strategy is highly similar to James Wynn's operation path.

They used Hyperliquid's high-leverage liquidation mechanism to launder illegal gains, create liquidation losses on HyperLiquid, and at the same time reverse positions on centralized trading platforms to make profits and fund laundering.