Jeff Yan, founder of decentralized perpetual exchange Hyperliquid, accused major centralized exchanges of concealing the true scale of liquidations during last week’s market flush that wiped out more than $19 billion in positions.
Yan claimed CEXs often publish far fewer liquidation events than occur in real time, in some cases showing one reported trade per second while thousands happen, and warned this could hide systemic stress from market participants.
The accusations followed an unprecedented spike in forced exits after U.S. President Donald Trump confirmed plans for 100% tariffs on Chinese tech imports, a shock that sent risk assets into rapid decline and triggered mass deleveraging.
CoinGlass data showed roughly 1.66 million traders liquidated within 24 hours, with Bitcoin and Ethereum among the hardest hit.
Yan argued that Hyperliquid’s fully on-chain liquidation model delivers transparent, verifiable records of orders and forced exits — an advantage he says centralized venues lack. “On-chain reporting means anyone can audit liquidations in real time,” he told followers on X, urging greater exchange accountability.
Binance and other large exchanges have pushed back on claims of deliberate underreporting. In related coverage, Binance founder Changpeng Zhao publicly disputed suggestions his firm hid activity, noting differences in how platforms stream and present liquidation feeds.
Market observers say the debate underscores a broader transparency gap between DeFi and centralized platforms.
While decentralized systems publish every state change on public ledgers, CEXs control and sometimes aggregate trade feeds, a practice critics say can obscure real-time risk during stress events. Regulators and industry groups are likely to revisit data-reporting standards as part of longer-term efforts to shore up market integrity.
As scrutiny intensifies, exchanges that commit to clearer, near-real-time disclosures may gain credibility with users and watchdogs alike, but the industry still lacks a common standard for reporting liquidations during extreme volatility.