The DeFi project HyperVault, operating on Hyperliquid's Layer 1 blockchain, is embroiled in fraud allegations following the disappearance of $3.6 million in crypto assets. On Friday, PeckShield identified unusual withdrawals of crypto and stablecoins, which were subsequently moved to Ethereum and laundered through Tornado Cash, a controversial crypto mixer. In response to the incident, HyperVault's social media presence vanished, with its X account deleted and website crashing. PeckShield and DeFi Llama have labeled the activity as fraudulent. This incident adds to the growing concerns in the web3 industry, which DappRadar reported lost nearly $6 billion to 'rug pulls' in 2025, marking a staggering increase from $90 million in 2024.