Centralised crypto exchanges are under fire following accusations that they may have underreported the scale of last week’s record-breaking liquidation event. Hyperliquid CEO Jeff Yan and data analytics platform CoinGlass both claim that exchanges such as Binance are using reporting methods that drastically underestimate actual liquidation volumes during market crashes.
The controversy erupted after a dramatic sell-off on Friday that wiped out more than $19 billion in leveraged positions — $16.7 billion in long liquidations and $2.46 billion in shorts — the largest in crypto’s history. The crash followed U.S. President Donald Trump’s announcement of sweeping tariffs on China, which sent Bitcoin tumbling from $114,450 to $102,000, while Ether and Solana also plunged sharply.
Yan highlighted a technical loophole in Binance’s data reporting system, noting that the platform’s documentation specifies that only the most recent liquidation within each one-second interval is recorded in its public data feed. This approach, designed for system efficiency, could miss dozens or even hundreds of liquidation orders happening simultaneously. “Because liquidations happen in bursts, this could easily be 100x under-reporting under some conditions,” Yan wrote on X.
CoinGlass echoed his concerns, suggesting that Binance’s reported data significantly underrepresents the actual liquidation totals. The platform said that the “real figure was likely much higher,” given that Binance only publishes one liquidation order per second.
The fallout was severe across the industry. More than 1,000 Hyperliquid (HYPE) wallets were wiped out, while around 6,300 wallets recorded combined losses exceeding $1.23 billion, according to data from Lookonchain.
Centralised exchanges also suffered operational setbacks during the crash. Binance users reported frozen interfaces, unresponsive buttons, and malfunctioning order placements — though liquidations appeared to execute flawlessly. Binance CEO Yi He later admitted that certain features “experienced brief lags” and that some wealth management products temporarily lost their pegs. She maintained, however, that these depegging incidents were triggered by the crash, not its cause. The exchange said it compensated affected users with more than $280 million.
Amid the chaos, decentralised finance (DeFi) protocols showed greater resilience. Ethena’s USDe stablecoin briefly lost its peg on Binance and Bybit but remained stable on the Curve protocol. Ethena Labs’ founder, Guy Young, confirmed that $2 billion in USDe redemptions were processed smoothly across DeFi platforms within 24 hours, underscoring the stability of decentralised systems during extreme volatility.
Hyperliquid later celebrated its own performance, emphasising that its on-chain system “had zero downtime or latency issues” throughout the turmoil — a sharp contrast to centralised rivals struggling to handle the record traffic.
