Hyperliquid co-founder and CEO Jeff Yan has raised concerns that centralized crypto exchanges—Binance in particular—may be underreporting liquidations.
In a post on X on Monday, Yan highlighted Binance’s documentation, which notes that the exchange’s order snapshot stream only records the most recent liquidation within each one-second interval.
“Since liquidations often occur in bursts, this method could underreport activity by up to 100x in some cases,” Yan wrote.
His comments mirrored a Saturday post by crypto data platform CoinGlass, which noted that the actual liquidated amounts were likely much higher because “Binance only reports one liquidation order per second.”
$19 Billion Liquidation Event
Bitcoin tumbled to $102,000 on Friday following US President Donald Trump’s announcement of sweeping tariffs on China. Ether fell to $3,500, while Solana slipped below $140 amid a broad market sell-off.
Data from CoinGlass showed Friday’s liquidations totaled $16.7 billion in longs and $2.456 billion in shorts, marking the largest liquidation event in crypto history.
The Liquidation Order Snapshot Stream, which delivers real-time updates on force-liquidated positions, batches outputs for higher performance. However, Yan noted that by only reporting the last liquidation per second, the system may significantly understate mass liquidation events, as more than 100 liquidations per trading pair can occur each second.
Yan’s remarks came after over 1,000 Hyperliquid (HYPE) wallets were completely wiped out during Friday’s crash. Lookonchain data revealed that more than 6,300 wallets are now in the red, with combined losses exceeding $1.23 billion.
Centralized Finance Faces Turmoil
Centralized crypto trading platforms encountered multiple issues during the recent flash crash, with Binance—the world’s largest exchange—drawing significant criticism.
In a Sunday post on X, Binance CEO Yi He stated that the platform’s core contract and spot matching engines, along with API trading, remained stable throughout the event. She acknowledged, however, that “some individual functional modules experienced brief lags, and certain wealth management products saw de-pegging.”
Yi He emphasized that the depegging did not trigger the market crash, noting that it occurred as a consequence of the downturn. She also confirmed that Binance had “initiated and completed compensation” for affected users, totaling over $280 million.
Despite this, reports suggest that prices for some major altcoins temporarily hit $0 on Binance during the mass liquidations. Pseudonymous crypto influencer Hanzo shared his firsthand experience of the platform’s downtime.
“On Binance, buttons stopped working. Stop orders froze, limit orders hung, only liquidations were executed perfectly.“
Binance later said the anomaly was a “display issue,” caused by changes to minimum price decimals for pairs such as IOTX/USDT, and not actual market data:
“Certain trading pairs, such as IOTX/USDT, recently reduced the number of decimal places allowed for minimum price movement, causing the displayed prices in the user interface to be zero, which is a display issue and not due to an actual $0 price.”
DeFi Platforms Demonstrate Greater Resilience
The Ethena USD stablecoin held its peg on the decentralized finance (DeFi) protocol Curve (CURV), even as it fell sharply on centralized exchanges. On Binance and Bybit, USDE experienced significant depegging.
In a Saturday post on X, Haseeb Qureshi, managing partner at crypto venture capital firm Dragonfly, noted that USDE dropped to $0.95 on Bybit and fell below $0.70 on Binance, while maintaining its peg on Curve throughout the market turmoil.
Guy Young, founder of Ethena Labs, confirmed that USDe minting and redemption functioned “perfectly” during Friday’s flash crash. He shared data showing that $2 billion in USDe was redeemed over 24 hours across multiple crypto platforms, including Curve, Fluid, and Uniswap.
Tom Cohen, head of investment and trading at quantitative crypto asset manager Algoz, told Cointelegraph that the event was “triggered by roughly $60–$90 billion of USDe being dumped simultaneously on Binance to exploit a mispricing, which set off a cascade of large sell-offs.” He added that this activity “moved thinly traded markets very rapidly.”
Hyperliquid also highlighted its performance amid the centralized exchange outages. In a Saturday post on X, the platform stated that “during the recent market volatility, the Hyperliquid blockchain experienced zero downtime or latency issues, even under record traffic and volumes.”
The post emphasized that this event served as a key stress test, demonstrating that Hyperliquid’s decentralized, fully on-chain financial system is both robust and scalable.
