TL;DR
- Transparency warning: Hyperliquid’s Jeff Yan says CEXs like Binance may underreport liquidations by up to 100x due to one-per-second reporting.
- Market impact: Bitcoin plunged below $105,000 before rebounding to $115,353, fueling a record $19.1 billion in liquidations.
- Data concerns: Coinglass noted over 1.6 million traders were liquidated, but stressed totals are likely higher given Binance’s reporting limits.
Centralized exchanges are facing renewed scrutiny after Hyperliquid co-founder Jeff Yan raised alarms about potential underreporting of liquidation data. His comments, shared Monday on X, suggest that the true scale of liquidations during volatile trading periods may be vastly higher than what is publicly disclosed.
Hyperliquid’s fully onchain liquidations cannot be compared with underreported CEX liquidations
Hyperliquid is a blockchain where every order, trade, and liquidation 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
Yan Flags Severe Underreporting Risks
Yan pointed to Binance’s documentation, which indicates that the exchange only reports one liquidation order per second, regardless of how many occur in that timeframe. Because liquidations often happen in rapid bursts, he argued this reporting method could undercount actual events by as much as 100 times. “Because liquidations happen in bursts, this could easily be 100x under-reporting under some conditions,” Yan wrote, underscoring the potential gap between reported and real market activity.
Market Turmoil Sparks Record Liquidations
The warning followed a dramatic wave of liquidations on Friday, triggered by sharp swings in the crypto market. Bitcoin briefly plunged below $105,000 before rebounding to $115,353 by early Monday morning, marking a 3.3% gain in the past 24 hours. The volatility wiped out positions across the board, leaving traders exposed to cascading losses.
Coinglass Data Highlights Scale of Losses
According to crypto derivatives data aggregator Coinglass, more than 1.6 million traders were liquidated on Friday alone. The total value of liquidations reached $19.1 billion, a record figure that reflects the intensity of the market’s downturn. Yet even this staggering number may not capture the full extent of the damage, given the reporting limitations highlighted by Yan.
Calls for Greater Transparency Intensify
CoinGlass itself acknowledged the potential undercount, noting in a post on X that “the actual total could be likely much higher” because Binance only reports one liquidation order per second. The convergence of Yan’s critique and Coinglass’s caution has amplified calls for exchanges to adopt more transparent reporting standards. For traders and analysts, accurate liquidation data is critical to assessing market health and risk exposure. Without it, the industry risks undermining trust at a time when volatility already challenges investor confidence.
