ExchangeMarkets
|4 min ReadExchanges accused of undercounting liquidations in crypto crash
Maya Chen
Senior Analyst
Published
Jan 16, 2026
The claim: underreported carnage
Hyperliquid co-founder and CEO Jeff Yan says centralized exchanges may be showing only a fraction of the forced-selling damage. His focus is Binance. In a detailed read of its developer docs, he points to a stream that only includes the latest liquidation within each one-second interval for a pair. That is good for performance. It is bad for accuracy when the tape is melting.
Jeff Yan on X linked the relevant documentation. Here is the page he cited from Binance’s developer site, which describes the liquidation order snapshot behavior: Binance Liquidation Order Streams. In violent bursts, he argues, there can be more than 100 liquidations per pair per second. “This could easily be 100x under-reporting under some conditions,” he wrote.
CoinGlass echoed the warning, noting the “actual liquidated amount was likely much higher” because “Binance only reports one liquidation order per second.” CoinGlass on X
What the numbers showed
The backdrop was ugly. Bitcoin fell to 3,500. Solana slipped under 16.7 billion of longs and $2.46 billion of shorts were liquidated on Friday, marking the largest liquidation event in crypto history. Some analysts believe the true figure is higher if exchange feeds undercounted the bursts.
Yan’s comments came as more than 1,000 Hyperliquid (HYPE) wallets were reportedly wiped out in the crash. Over 6,300 wallets are in the red with combined losses above $1.23 billion, per Lookonchain on X.
CEX strain vs DeFi resilience
Centralized platforms hit friction. Binance drew heavy criticism as users reported lags and broken controls during peak stress. In a Sunday update, Binance co-founder Yi He said core contract and spot matching engines and API trading stayed stable, but “some individual functional modules” had brief lags and “certain wealth management products” depegged. She added that depegs followed the downturn, did not cause it, and that Binance completed over $280 million in compensation to affected users. Yi He on X
Some traders saw major altcoins display a price of zero on Binance during the chaos. Binance later said this was a “display issue,” tied to reduced minimum price decimals on pairs like IOTX/USDT, not actual trades at $0.
DeFi told a different story. Ethena USD held its peg on Curve even as it went off-peg on centralized venues. USDe printed about 0.70 on Binance at one point, according to Haseeb Qureshi on X. Ethena’s founder Guy Young said USDe minting and redeeming worked “perfectly” during the flash crash, with $2 billion redeemed across Curve, Fluid, and Uniswap.
Tom Cohen of Algoz told Cointelegraph that the slide “can be traced to roughly 90 billion of USDe simultaneously dumped onto Binance to exploit a mispricing,” which then hit thin markets and accelerated the sell-off.
Hyperliquid, meanwhile, said its chain had “zero downtime or latency issues despite record traffic and volumes,” calling it an important stress test of a decentralized, fully on-chain system. Hyperliquid on X
Very big lesson. Very strong signal. In panic, counting every forced sale matters. If the feeds miss bursts, the market’s risk picture looks prettier than it is. Everybody knows it. Transparency wins.
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