The founder of Hyperliquid delivered harsh criticism against centralized exchanges for their lack of transparency, while Binance and CZ defended their approach to user protection. The latest crash wiped out over $19 billion.
The Transparency Gap in Centralized Exchanges
Hyperliquid founder Jeff Yan criticized the lack of transparency in how centralized exchanges (CEXs) report liquidations, contrasting their model with Hyperliquid’s approach.
These remarks followed one of the largest liquidation events in crypto history, affecting over 1.6 million traders. The incident sparked a broader debate on fairness and accountability in crypto trading.
Yan: CEXs Are Intentionally Underreporting Liquidations
Yan emphasized the significant difference between centralized and decentralized systems.
He stated that some CEXs openly admit to dramatically underreporting user liquidations. In the case of Binance, even if thousands of liquidations happen in the same second, only one might be recorded. According to him, this can lead to 100x underreporting in certain cases.
He expressed hope that the industry would adopt transparency and neutrality as core principles of the new financial system and encouraged others to follow Hyperliquid’s example.
Hyperliquid’s Transparent Approach
Liquidations on Hyperliquid are fully on-chain and cannot be compared to the underreported liquidations on CEXs.
Yan stated.
Hyperliquid is a blockchain where every order, trade, and liquidation happens fully on-chain. Anyone can verify how the chain operates, track every liquidation, and even confirm the system’s solvency in real time.
Yan believes that transparency and neutrality are what make DeFi the right foundation for the future of global finance.
Community Calls for Better Protection
One trader suggested that exchanges should implement false wick liquidation protection to better safeguard users. While praising Hyperliquid’s transparency, they noted that additional safeguards are necessary to prevent unexpected losses during volatile market conditions.
Community members also called on users to move away from CEXs and demanded greater transparency and integrity in financial systems.
Coinglass also commended Hyperliquid for improving transparency in industry data and expressed hope that other platforms would follow their lead.
CZ Pushes Back
Binance founder Changpeng Zhao (CZ) responded indirectly to Yan’s comments:
Some people ask why BNB is so strong. While others try to ignore, hide, shift blame, or attack competitors, key @BNBChain ecosystem players (Binance, Venus, and others) put hundreds of millions of their own money on the line to protect users.
He ended his post with “different value systems” – a phrase many interpreted as a subtle jab at Hyperliquid.
Market Crash Tested Platform Resilience
The discussion followed a massive market crash that shook the crypto sector. Over 1.6 million traders were liquidated, resulting in $19 billion in losses. During this period, Hyperliquid recorded the highest liquidation volume – $10.31 billion – followed by Bybit and Binance.
Despite the extreme volatility, Hyperliquid maintained 100% uptime and reported zero bad debt, showcasing the strength of its on-chain infrastructure.
Transparency Is No Longer Optional
This critique highlights that transparency and accountability are no longer optional.
On DeFi platforms like Hyperliquid, every trade, liquidation, and position is publicly visible on-chain, giving traders a clear, real-time view of the market. Centralized exchanges, however, are reportedly hiding much of this data, leaving users in the dark during critical moments.
Experts are calling for clearer rules and better accountability, urging all exchanges to provide transparent, verifiable data to protect traders.
Frequently Asked Questions
Find answers to the most common questions below.
Jeff Yan accused centralized exchanges, including Binance, of underreporting liquidation data and lacking transparency, especially during volatile events.
All transactions, orders, and liquidations on Hyperliquid are fully on-chain and publicly verifiable in real time, ensuring full transparency and accountability.
Binance founder CZ responded indirectly, defending BNBChain ecosystem’s user protections and emphasizing differing “value systems” from competitors like Hyperliquid.
This article is for general informational purposes only and is not intended to be, and should not be construed as, legal or investment advice. Crypto-assets are highly volatile, so only invest funds that you are willing to lose and use your own research and risk management.
