Hyperliquid Founder Jeff Yan Accuses Binance and CEXs of Underreporting Liquidations by Up to 100x

Jeff Yan, co-founder and CEO of the decentralized perpetuals exchange Hyperliquid, publicly criticized centralized exchanges (CEXs) like Binance for significantly underreporting liquidation data.

This comes in the wake of a massive crypto market crash on October 10-11, 2025, which triggered over $19 billion in reported liquidations across the industry—the largest cascade in crypto history, affecting more than 1.6 million traders.

Bitcoin dropped from around $122,000 to $109,000 amid a broader sell-off, with altcoins falling up to 60%. Yan’s post highlights a transparency gap between on-chain DEXs like Hyperliquid and opaque CEXs.

Hyperliquid’s Model: Every order, trade, and liquidation occurs fully on-chain, making all data verifiable in real-time by anyone. During the crash, Hyperliquid handled $10.31 billion in liquidations with zero downtime, processing $50-70 billion in total trading volume.

Citing Binance’s own API documentation, Yan notes that their “Liquidation Order Snapshot Stream” only reports one liquidation per second every 1000 milliseconds, even if thousands occur simultaneously.

Liquidations often “happen in bursts” during volatility, leading to underreporting by a factor of up to 100x. For context, if Binance’s reported $2.4 billion in liquidations is undercounted by 100x, the true figure could exceed $240 billion—pushing industry totals toward $257 billion.

Yan emphasized: “Transparency and neutrality are key reasons that fully onchain DeFi is the ideal infrastructure for global finance.” He hopes the industry shifts toward verifiable, on-chain systems. This isn’t the first time such discrepancies have been flagged.

Data aggregator CoinGlass echoed Yan’s concerns, stating the $19.1 billion total is “likely much higher” due to Binance’s one-per-second limit. Earlier in 2025 February, Bybit’s CEO Ben Zhou claimed a similar event’s reported $2 billion was closer to $8-10 billion after accounting for API throttling.

The crash was exacerbated by leveraged positions unraveling across platforms: Total Reported Liquidations: $19.1-20 billion. Questioned due to reporting limits; experienced ~1-hour delays in closing positions.

Binance typically has 5x Hyperliquid’s open interest (OI) and volume, yet reported far fewer liquidations. Community estimates suggest true totals could hit $40-50 billion or more. A mysterious $1 billion short position on Hyperliquid executed just before the crash also drew scrutiny, with Binance founder Changpeng Zhao (CZ) questioning its validity.

CZ indirectly rebutted Yan, resharing data showing Binance liquidated 60% of long positions vs. ~90% on DEXs like Hyperliquid. He highlighted Binance injecting “hundreds of millions” to protect users and providing $283 million in compensation. CZ quipped “different value systems,” implying CEXs prioritize user safeguards over raw transparency.

X erupted with support for Yan, calling out CEX “market manipulation” and praising Hyperliquid’s on-chain edge. HYPE Hyperliquid’s token jumped 10% post-statement. Critics like Coffeezilla noted the irony of a single trader profiting billions from the cascade.

Traders and analysts like Derivatives_Ape and WatcherGuru argue this exposes CEX vulnerabilities, echoing FTX’s 2022 collapse. Some speculate unreported liquidations mask deeper leverage risks. DEXs offer verifiable data but can be brutal with no “protection” like Binance’s interventions, while CEXs provide user-friendly safeguards at the cost of opacity.

As volatility rises, demands for on-chain transparency could accelerate migration to platforms like Hyperliquid—potentially eroding Binance’s dominance already down market share to DEXs. If Yan’s 100x claim holds, it reframes the crash as far more destructive, highlighting systemic risks in centralized trading.