Hyperliquid CEO accuses CEXs like Binance of underestimating settlement data

By Hannah Perez

J.Hyperliquid’s eff Yan warns that CEX’s per-second reporting limit could be hiding the true magnitude of leveraged losses, citing Binance documentation.

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• Hyperliquid CEO: Centralized exchanges hide the real risk of crypto settlements.
• The comments come in response to the historic $19 billion settlement event.
• Yan criticizes Binance’s opacity, says CEXs do not report actual liquidation figures.
• He estimates that the actual size of the settlements could be 100 times larger.

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The co-founder of HyperliquidJeff Yan, has issued a severe criticism against the main exchanges cryptocurrency exchanges (CEX) for allegedly incomplete reporting of settlement data.

The comments come following the largest liquidation event in recorded cryptocurrency market history on Friday; an event that saw the evaporation of almost USD $20 billion in leveraged positions in a 24-hour period.

Last Friday, the cryptocurrency derivatives market experienced a flash crash massive, with industry data, such as CoinGlassreporting approximately USD $16.8 billion in liquidations of long positions and USD $2.5 billion in short positions, totaling nearly USD $19.3 billion in losses in a single day.

Bitcoin fell below USD $105,000 subtracting $17,000 in a matter of hours during the event, which marked the largest volume of dollar settlements ever recorded for a 24-hour period in the cryptocurrency market to date.

The real numbers could be 100 times worse

However, in a post on X this Monday, Jeff Yan, co-founder of the exchange decentralized (DEX) Hyperliquidwarned that the actual number of liquidations could be significantly higher than public reports suggest, pointing directly to CEX transparency protocols as possible culprits.

“Because liquidations occur in bursts, this could easily be 100 times underreported under some conditions“said Yan.

Hyperliquid’s fully onchain liquidations cannot be compared with underreported CEX liquidations

Hyperliquid is a blockchain where every order, trade, and settlement happens onchain. Anyone can permissionlessly verify the chain’s execution, including all liquidations and their… pic.twitter.com/K5sv74LJgO

— jeff.hl (@chameleon_jeff) October 13, 2025

Criticism focuses on the CEX data reporting methodology, suggesting that platforms such as Binanceone of the greatest exchanges in the world by trading volume, they could be limiting the number of liquidation orders they report to just one per second, even when thousands of them occur simultaneously during periods of high volatility. Yan cited the platform’s public documentation as the basis for his warning.

The discrepancy in data reporting, according to Yan, represents a significant risk. Underestimating the volume of liquidations could mask the true market risk exposure and the magnitude of losses for investors. traders.

Hyperliquidwhose model is totally on-chainargues that their inherent transparency allows for real-time, public verification of every order, trade and settlement, a feature the team says sets them apart from the opacity of CEXs.

Binance presented critical problems

The debate on the transparency of settlement data highlights the tension between payment models exchanges centralized and decentralized. While CEXs manage operations on private servers, which can limit the granularity of the data they make public, DEXs, such as Hyperliquidrecord each transaction directly on the blockchain, offering an immutable record that can be verified by anyone.

Binance acknowledged on Friday that its platform experienced hiccups during extreme market turbulence, including price decoupling of several tokens. USDe of Ethenathe third largest stablecoin by market capitalization, it lost parity with the US dollar falling to 65 cents in Binancewhich exacerbated user losses.

The executives of Binance publicly apologized and announced two distributions of USD $283 million to compensate users affected by losses from futures, margins and loans that used USDe, BNSOL or WBETH as collateral.

This historic nearly $20 billion liquidation collapse is generating intense scrutiny over risk management practices and data disclosure in the cryptocurrency industry, with key figures like Yan advocating for greater transparency as central to the credibility and security of the future financial system.

The cryptocurrency market is showing signs of recovery after the chaos, with Bitcoin emerging 2.5% price above USD $114,000 according to data from CoinGecko at the time of editing this article.

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Article written with the help of AI, edited by DailyBitcoin

Edited image from Unsplash

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