Hyperliquid CEO Jeff Yan has raised concerns over how centralized exchanges — particularly Binance — report liquidation data, warning that the method may significantly understate actual losses during major sell-offs.
The comments come after a massive market crash on Friday, when Bitcoin (BTC) dropped to $102,000 following U.S. President Donald Trump’s announcement of sweeping tariffs on China. Ether (ETH) slid to $3,500, and Solana (SOL) fell below $140 amid a wave of forced liquidations.
According to data from CoinGlass, roughly $16.7 billion in long positions and $2.46 billion in shorts were wiped out, marking the largest liquidation event in crypto history.
In a Monday post on X, Yan pointed to Binance’s own documentation, which explains that its order snapshot stream includes only the most recent liquidation event within each one-second interval.
While this batching process improves system performance, Yan warned that it likely causes significant underreporting during volatile periods — when more than 100 liquidations per pair can occur every second.
“Because liquidations happen in bursts, this could easily be 100x under-reporting under some conditions,” Yan wrote.
His warning echoed a statement from crypto data provider CoinGlass, which also claimed that the actual liquidation totals were “much higher” than reported since “Binance only logs one liquidation order per second.”
Centralized platforms, especially Binance, faced heavy scrutiny during the flash crash. In a Sunday post on X, Binance CEO Yi He said the exchange’s core systems — including contract and spot matching engines — remained stable, but admitted that some features experienced “brief lags.”
She acknowledged that certain wealth management products temporarily depegged, but stressed the event occurred after the market downturn and was not its cause. Binance reportedly compensated affected users with over $280 million.
Still, users reported that some altcoin prices briefly appeared as $0 on Binance during the crash. Crypto influencer Hanzo described his experience:
“On Binance, buttons stopped working. Stop orders froze, limit orders hung — only liquidations executed perfectly.”
Binance later clarified that this was a display issue, not a real market event. It occurred after the platform changed the minimum price decimals for pairs like IOTX/USDT, temporarily causing the interface to show zero prices.
While centralized exchanges stumbled, DeFi platforms held up better. The Ethena USD (USDe) stablecoin maintained its peg on Curve, even as it fell sharply on Binance and Bybit — hitting $0.95 on Bybit and dropping below $0.70 on Binance.
Ethena Labs founder Guy Young said that minting and redeeming USDe worked “perfectly” during the crash, noting that about $2 billion worth of USDe was redeemed across Curve, Fluid, and Uniswap within 24 hours.
Tom Cohen, head of trading at Algoz, told Cointelegraph the chaos started when between $60–$90 billion of USDe was dumped onto Binance to exploit a pricing inefficiency. This, he said, “moved thinly traded markets very quickly,” triggering massive sell-offs.
Amid the turmoil, Hyperliquid praised its own performance. The company said its blockchain experienced zero downtime or latency during the heavy traffic, calling it an important stress test for decentralized finance.
“This proves that Hyperliquid’s fully on-chain financial system is both robust and scalable,” the team said.
