Binance and Hyperliquid stick to differing accounts of last week’s $19 billion market crash

The founder of the perpetual decentralized exchange (DEX) Hyperliquid has accused Binance of hiding liquidation data during last week’s record market crash, which took Bitcoin below $110,000 for the first time since September 28. 

Jeff Yan, founder of Hyperliquid, claimed that Binance and other centralized exchanges (CEXs) have been concealing the extent of user liquidations during last Friday’s market bloodbath. In a post on X Monday, Yan said the crash, which erased more than $20 billion from global crypto markets per Cryptopolitan’s report, exposed “how centralized platforms hide data.”

“Anyone on Hyperliquid can permissionlessly verify the chain’s execution, including all liquidations and their fair execution for all users, and anyone can verify the solvency of the entire system in real time,” Yan wrote. 

He continued to say Hyperliquid’s system records every order, trade, and liquidation onchain, so all of its data is supposedly “publicly verifiable.” 

Binance only reports some liquidations, Yan insists

According to Yan, Binance only reports one liquidation per symbol every 1,000 milliseconds, even if thousands occur within that same period. “Because liquidations happen in bursts, this could easily be 100x under-reporting under some conditions,” he posted.

Hyperliquid’s fully onchain liquidations cannot be compared with underreported CEX liquidations

Hyperliquid is a blockchain where every order, trade, and liquidation happens onchain. Anyone can permissionlessly verify the chain’s execution, including all liquidations and their… pic.twitter.com/K5sv74LJgO

— jeff.hl (@chameleon_jeff) October 13, 2025

The Hyperliquid founder shared a screenshot from Binance’s developer forum stating: “For each symbol, only the latest one liquidation order within 1000ms will be pushed as the snapshot. If no liquidation happens in the interval of 1000ms, no stream will be pushed.” 

The back and forth between the exchanges came days after a decline across global crypto markets on Friday. The downturn was triggered by US President Donald Trump’s announcement of a 100% tariff on Chinese goods containing any “crucial software” beginning on November 1. 

During the selloff, Hyperliquid’s onchain liquidation data was reportedly visible in real time, and some crypto investors are now comparing its transparency to that of centralized exchanges like Binance, OKX, and Bybit. 

“Long story short, Hyperliquid and Ethena did nothing wrong. Binance did many things wrong,” one X account commented, defending Yan’s claims.

CZ defends Binance, clarifies links to Hyperliquid

Binance founder Changpeng Zhao (CZ) appeared to respond to Yan’s chatter, albeit without naming Hyperliquid directly. He reposted a message from a BNB community influencer that lauded Binance for compensating affected traders following the October 10 market slump. The post claimed the exchange paid out more than $283 million to users within 24 hours of the incident.

“Some people ask why is BNB so strong? While others tried to ignore, hide, shift blame, or attack competitors, the key BNBChain ecosystem players (Binance, Venus, and more) took hundreds of millions out of their own pockets to PROTECT USERS. Different value systems,” CZ wrote on X. 

When the accusations were being thrown around last Friday, including one that Binance incubated Hyperliquid, Zhao revealed it was Hyperliquid’s founder who had a brief history with Binance Labs’ early incubation program. 

Gossip tweet. Saw a couple of posts on this topic:

If you didn't know, Jeff (HL) was part of the YZiLabs (Binance Labs back then) incubation season 1 cohort in 2018. 🤣

Unfortunately, that project failed. YZiLabs did not recoup any of its investment. It happens.

I did not… https://t.co/zUVtjQ3RCO

— CZ 🔶 BNB (@cz_binance) October 10, 2025

“Jeff (HL) was part of the YZiLabs (Binance Labs back then) incubation season 1 cohort in 2018,” he wrote. “Unfortunately, that project failed. YZiLabs did not recoup any of its investment. It happens.”

The former CEO reiterated he personally had little contact with Yan at the time, saying: 

“I did not interact with Jeff much back then. I forgot about it. I only learned this from Ella early this year. I was supposed to have a call with Jeff a few months back, but I missed it due to a schedule error on my part…YZI Labs, to the best of my knowledge, was not given and does not own any investments (equity or token) in HL.”

Hyperliquid questioned over centralization

Yan’s criticism of Binance sparked pushback on one of its biggest pain points: validators and governance. Naysayers claim that the DEX’s validators do not truly validate transactions and instead “blind sign” blocks without verifying their contents. 

“The validators just blind sign the prebuilt blocks without knowing what’s in it,” one community member noted on X. “They are more like attesters than validators.”

Others pointed to the platform’s closed-source code and validator selection process. 

“Seven of eleven ‘independent’ validators were hand-picked by HL. Add that to the validators HL is running directly and they control eleven of sixteen,” a DeFi onchain asset allocator Spark contributor explained, also claiming Hyperliquid “directly controls about 81% of the total stake,” leaving the system reliant on a centralized API for uptime.

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