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

Jeff Yanco-founder and CEO of decentralized perpetual exchange Hyperliquid, has publicly criticized centralized exchanges (CEXs) like Binance for significantly underreporting liquidation data.

This follows a massive crypto market crash on October 10-11, 2025, which triggered over $19 billion in reported liquidations across the industry – the largest stunt in crypto history, affecting over 1.6 million traders.

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

Hyperliquid model: Every order, transaction and liquidation occurs entirely on-chain, making all data verifiable in real time by anyone. During the crash, Hyperliquid processed $10.31 billion in liquidations without any downtime, processing between $50 billion and $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 1,000 milliseconds, even though thousands are happening simultaneously.

Liquidations “often occur in bursts” during periods of volatility, leading to underreporting of up to 100 times. As a reminder, if the $2.4 billion in liquidations announced by Binance are underestimated by 100 times, the actual figure could exceed $240 billion, which would push the industry total towards $257 billion.

Yan highlighted: “Transparency and neutrality are the main reasons why fully on-chain DeFi is the ideal infrastructure for global finance. He hopes the industry will move toward on-chain verifiable systems. This is not the first time such discrepancies have been reported.

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

The crash was exacerbated by the disappearance of leveraged positions across all platforms: Total liquidations reported: $19.1-$20 billion. Questioned due to reporting limitations; experienced delays of approximately 1 hour in closing positions.

Binance typically has 5x the open interest (OI) and volume of Hyperliquid, but has reported far fewer liquidations. Community estimates suggest the true total could reach $40 billion to $50 billion or more. A mysterious billion-dollar short position in Hyperliquid executed just before the crash has also come under scrutiny, with Binance founder Changpeng Zhao (CZ) questioning its validity.

CZ indirectly refuted Yan, sharing data showing that Binance liquidated 60% of long positions compared to around 90% on DEXs like Hyperliquid. He pointed out that Binance had injected “hundreds of millions” to protect users and provided $283 million in compensation. CZ joked about “different value systems,” implying that CEXs prioritize user protection over raw transparency.

X erupted with support for Yan, calling CEX “market manipulation” and praising Hyperliquid’s on-chain advantage. HYPE Hyperliquid’s token jumped 10% after the statement. Critics like Cafezilla pointed out the irony of seeing a single trader profiting billions of dollars from this stunt.

Traders and analysts like Derivatives_Ape and WatcherGuru say this exposes CEX vulnerabilities, echoing FTX’s collapse in 2022. Some speculate that undeclared liquidations mask deeper debt risks. DEXs offer verifiable data but can be brutal without “protection” like Binance’s interventions, while CEXs offer user-friendly safeguards at the cost of opacity.

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