Hyperliquid News Today: Crypto's Transparency Battle: CEXs Accused of Hiding Liquidations as DEXs Demand Accountability

Jeff Yan, co-founder of decentralized exchange Hyperliquid, has accused major centralized exchanges (CEXs) like Binance of drastically underreporting liquidation data during volatile market conditions, with some platforms potentially missing 99% of actual liquidation events. The critique follows a record $19.1 billion in liquidations across crypto markets on October 10–11, wiping out over 1.6 million traders as Bitcoin plunged below $105,000 before rebounding .

Yan highlighted technical limitations in CEX reporting systems, noting that platforms such as Binance publish only one liquidation order per second-even when thousands occur simultaneously. "Because liquidations happen in bursts, this could easily be 100x under-reporting under some conditions," he stated in a post on X, citing Binance's public documentation . The founder emphasized that Hyperliquid's fully on-chain model allows real-time verification of all trades and liquidations, a stark contrast to the alleged opacity of CEXs.

The liquidation surge followed a sharp market downturn triggered by U.S. President Donald Trump's announcement of 100% tariffs on Chinese goods, including critical software. During the crisis, Binance faced temporary technical issues, leaving some users unable to close positions for nearly an hour, while Hyperliquid maintained 100% uptime and reported zero bad debt . CoinGlass, a derivatives data aggregator, noted that Binance's reported liquidations could be "likely much higher," given its one-per-second reporting mechanism .

Binance's CEO, Changpeng Zhao (CZ), indirectly pushed back against the criticism, touting the exchange's efforts to protect users during the crash. "While others tried to ignore, hide, shift blame, or attack competitors, key BNBChain ecosystem players took hundreds of millions out of their own pockets to PROTECT USERS," he wrote on X, framing the exchange's actions as a reflection of its "value system" .

Yan's claims have reignited debates about transparency in crypto trading. Hyperliquid's fully on-chain infrastructure, where every trade and liquidation is publicly verifiable, has been praised by data platforms like CoinGlass as a benchmark for accountability. Meanwhile, critics of CEXs argue that underreported liquidations create blind spots for traders, obscuring systemic risks during market stress .

The controversy coincided with Hyperliquid's activation of its HIP-3 protocol upgrade on October 13, enabling permissionless deployment of perpetual futures markets. The upgrade requires stakers to lock 500,000 HYPE tokens, aiming to decentralize market creation while maintaining safeguards like validator slashing and open interest caps . The move has bolstered HYPE's price, which rose over 13% in 24 hours to $42, as the platform solidified its position as a leading decentralized trading venue .

Market recovery has been uneven. While crypto's total market cap rebounded above $3.85 trillion by October 13, futures open interest (OI) dipped to $154.88 billion on Saturday from $220.36 billion on Friday, reflecting reduced leverage exposure . Analysts warn that underreported liquidations could distort risk assessments for institutional investors, particularly as markets stabilize.

The exchange of public criticism underscores deepening tensions between decentralized and centralized trading models. Yan called for industry-wide adoption of transparent reporting standards, while CZ's response highlighted divergent philosophies on user protection and data disclosure. As regulators and traders scrutinize exchange practices, the debate over transparency is expected to shape the future of crypto infrastructure.

[1] This is the Full Title of the First News Article (https://www.theblock.co/amp/post/374311/hyperliquid-founder-says-certain-cexs-may-underreport-liquidations)

[2] This is the Full Title of the Second News Article (https://www.fxstreet.com/cryptocurrencies/news/hyperliquid-founder-accuses-cexs-of-hiding-user-liquidation-data-202510130916)

[4] Full Title of the Fourth Source Used (https://coinpedia.org/news/hyperliquid-founder-calls-out-binance-and-cexs-for-hiding-liquidation-data-amid-market-crashes-cz-reacts/)

[6] Full Title of the Sixth Source Used (https://www.coindesk.com/business/2025/10/13/hyperliquid-s-hip-3-upgrade-to-unlock-permissionless-perp-market-creation)

[7] Full Title of the Seventh Source Used (https://www.theblock.co/post/374306/hyperliquid-activate-hip-3-upgrade)