Hyperliquid News Today: CEXs Under Fire for 100x Liquidation Underreporting as DEXs Push Transparency

Jeff Yan, founder of decentralized exchange Hyperliquid, has publicly criticized centralized exchanges (CEXs) like Binance for allegedly underreporting liquidation data during the recent crypto market crash, which saw $19 billion in liquidations-the largest in crypto history . Yan argued that CEXs, including Binance, Coinbase, and Kraken, underreport liquidation events by up to 100 times, citing Binance's documentation that only reports one liquidation order per second, even during bursts of thousands of simultaneous transactions .

Hyperliquid, which operates fully on-chain, reported $10.31 billion in liquidations during the crisis but maintained zero downtime and solvency, contrasting sharply with CEXs that faced congestion and outages . Yan emphasized that on-chain transparency allows real-time verification of trades and liquidations, calling it a "key reason fully on-chain DeFi is the ideal infrastructure for global finance" . He accused CEXs of "gaslighting" users by downplaying solvency risks, a claim that has sparked broader debates about transparency in the industry.

The market crash, triggered by U.S. President Donald Trump's tariffs on China, saw Bitcoin plunge below $105,000, while Ether and Solana also dropped sharply. Over 1.6 million traders were liquidated, with Coinglass noting the actual figure could be "much higher" due to CEXs' reporting practices . Binance, which reported $2.41 billion in liquidations, faced scrutiny as some altcoins briefly displayed $0 prices. The exchange attributed this to a "display issue" related to decimal adjustments for certain trading pairs .

Binance CEO Changpeng Zhao (CZ) pushed back against Yan's claims, highlighting BNB Chain ecosystem players' efforts to protect users with hundreds of millions in self-funded compensation . CZ's post, however, was interpreted as a veiled rebuke of Hyperliquid's criticism, stating, "Different value systems" underscored the growing divide between on-chain and centralized models.

Crypto.com CEO Michael Seniv added to the discourse, urging regulators to investigate both CEXs and DEXs following the liquidation surge . The incident has intensified calls for clearer rules and accountability, with experts emphasizing the need for verifiable data to protect traders.

Hyperliquid's resilience has bolstered its reputation as a transparent alternative. The platform's HIP-3 upgrade, enabling permissionless perpetual market creation, further cements its position as infrastructure for on-chain finance . Yan's stance aligns with a broader industry shift toward decentralized systems, where liquidity and trust are increasingly valued.

As the crypto sector grapples with systemic risks, the debate over transparency and accountability remains central. With regulators and traders scrutinizing exchange practices, the pressure on CEXs to match DEXs' on-chain openness is likely to intensify.

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[1] Hyperliquid Founder Slams Binance, CEXs Blaming Then Of 100x ... (https://coingape.com/hyperliquid-founder-slams-binance-cexs-blaming-then-of-100x-underreporting/)

[2] Hyperliquid founder says certain CEXs may underreport liquidations (https://www.theblock.co/post/374311/hyperliquid-founder-says-certain-cexs-may-underreport-liquidations)

[3] Centralized Exchanges Underreport Liquidations: Hyperliquid CEO (https://cointelegraph.com/news/centralized-crypto-exchanges-undrerreport-liquidadations-even-100x-hyperliquid-ceo)

[4] Hyperliquid Founder Calls Out Binance and CEXs for Hiding ... (https://coinpedia.org/news/hyperliquid-founder-calls-out-binance-and-cexs-for-hiding-liquidation-data-amid-market-crashes-cz-reacts/)

[5] What are Hyperliquid Improvement Proposals (HIPs)? (https://hyperpc.app/blog/hyperliquid-improvement-proposals)