Binance, Hyperliquid Clash Over Market Transparency Claims
- Hyperliquid founder Jeff Yan accuses Binance and other CEXs of underreporting liquidations.
- CZ defends Binance, saying the exchange used its own funds to protect users during turmoil.
- The dispute reignites debate over DeFi transparency versus centralized stability.
A heated debate has erupted between decentralized exchange Hyperliquid and major centralized exchanges like Binance. The dispute began when Hyperliquid founder Jeff Yan accused leading crypto trading platforms of hiding the true scale of market liquidations.
Yan made the claims shortly after last week’s crypto market crash, which triggered one of the biggest liquidation events of 2025. Bitcoin plunged from $122,000 to $107,500, liquidating over $19 billion leveraged positions. Data from CoinGlass showed that more than 1.5 million traders were affected.
During the crash, Hyperliquid processed tens of billions in trades without downtime. In contrast, several centralized exchanges, including Binance, Coinbase, and Kraken, faced service disruptions that left traders unable to close positions.
Jeff Yan Says CEXs Report Only a Fraction of Liquidations
Following the market chaos, Yan defended Hyperliquid’s performance and criticized CEXs for their lack of transparency. He claimed exchanges like Binance underreport liquidation data by as much as 100 times. In a post on X, Yan said Hyperliquid’s liquidation data is fully on-chain and verifiable in real time. “Some CEXs publicly document that they dramatically underreport user liquidations,” he wrote.
According to Yan, Binance reports only one liquidation per second, even when thousands occur simultaneously. He said that because liquidations happen in bursts, this could easily be 100x underreporting under some conditions.
Yan said this difference highlights why fully on-chain DeFi systems are better suited for global finance. He noted that Hyperliquid records every order, trade, and liquidation directly on its blockchain. Anyone can verify the data without relying on internal reports. “Transparency and neutrality are key reasons that fully on-chain DeFi is the ideal infrastructure for global finance,” Yan stated.
The Hyperliquid founder said his platform’s real-time reporting ensures all users can see how liquidations occur and assess solvency instantly. He added that on-chain systems reduce the need for trust and improve fairness across markets.
CZ Responds, Defends Binance’s Priorities During the Crash
Binance founder Changpeng Zhao, widely known as CZ, responded on social media. While he did not name Hyperliquid directly, he appeared to reference the criticism in a post about user protection.
“Some people ask why is #BNB so strong?” CZ wrote. “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.” He ended his post with the words “different value systems,” which many interpreted as a response to Yan’s comments about transparency.
The back-and-forth comes at a sensitive time for centralized exchanges. In the recent crash, Binance experienced temporary technical problems, which hampered the ability of users to close their positions. Traders expressed frustration online, saying the delays increased their losses.
Related: Trader on Hyperliquid Loses $21M After Private Key Breach
Meanwhile, Hyperliquid handled between $50 billion and $70 billion in volume without any interruptions. The DEX, built on its own Layer-1 blockchain, continues to attract high trading activity. According to DeFiLlama, Hyperliquid processed $319 billion in volume in July alone, helping DeFi perpetual markets reach a record $487 billion that month.
Following the online exchange, Zhao clarified speculation about Binance’s previous relationship with Hyperliquid. He said that Jeff Yan had joined Binance Labs’ first incubation program in 2018 with a startup called YZiLabs. However, that company failed, and Binance did not recover its investment. He confirmed that Binance currently has no financial or operational ties with Hyperliquid.
The disagreement underscores a growing divide between centralized and decentralized trading platforms. With the market volatility escalating, both the parties continue to defend their models. The debate has brought the argument concerning which model, on-chain transparency or centralized control, is ideal for the future of crypto trading.
