The weekend’s dramatic crypto crash across major cryptocurrencies has triggered sharp criticism of centralised exchanges, with industry figures accusing platforms like Binance of underreporting the scale of liquidations. Hyperliquid co-founder and CEO Jeff Yan highlighted a serious flaw in the way liquidation data is presented, claiming that Binance’s current system, which only displays the last liquidation per trading pair each second, masks the true extent of market wipeouts.
According to Yan, during high volatility, exchanges process over 100 liquidations per pair per second, yet only the most recent liquidation in that one-second window is shown in public order streams. This batching method, supposedly implemented for performance optimisation, may create what Yan called a potential “100x under-reporting” scenario in extreme market crashes. His remarks followed a similar warning from crypto analytics platform CoinGlass, which said that official figures “likely fall short of reality” due to the reporting structure.
Record $19 Billion Liquidated in One Day
On Friday, Bitcoin plunged to $102,000 following US President Donald Trump’s announcement of sweeping tariffs on China. Ether also dropped sharply to $3,500, while Solana slipped below the $140 mark, triggering mass liquidations across leveraged positions. CoinGlass data reported $16.7 billion in long liquidations and a further $2.456 billion in short positions wiped out, marking the biggest liquidation event in crypto history.
Market observers have warned that this figure may only reflect a fraction of the damage. If centralised exchanges are indeed only reporting one liquidation per second, as claimed, then a substantial number of forced liquidations may have gone uncounted in official tallies. This has sparked renewed calls for transparency and decentralised alternatives where liquidation logs cannot be filtered or compressed.
US Government Shutdown Leaves ETF Approvals in Limbo
Adding to market uncertainty is the ongoing shutdown of the US federal government, now entering its third week. As funding negotiations between Republicans and Democrats stalled on 1 October, government agencies including the Securities and Exchange Commission were reduced to skeleton staffing. With the SEC unable to operate at full capacity, deadlines for at least 16 crypto-related exchange-traded fund applications have passed without decisions.
The industry had anticipated a wave of approvals this month, with analysts referring to it as a potential “ETF floodgate moment.” In just the first eight days of October alone, 21 new applications were filed, reflecting intense institutional interest in crypto exposure through regulated financial instruments. However, all progress has ground to a halt and the fate of these high-profile filings remains in suspension until Congress passes a funding bill that President Trump can sign to restore full government operations.
The ETF freeze has added another layer of market anxiety, with traders split between anticipation of a bullish breakout once approvals resume and concern that ongoing political paralysis could delay critical inflows into the sector.
Trade Tensions Ease, Offering a Glimmer of Market Relief
Amid the chaos, a note of relief came from geopolitical developments. Over the weekend, representatives from the United States and China toned down their rhetoric following heightened tension triggered by China’s rare earth export controls and Trump’s announcement of an additional 100% tariff on Chinese goods.
China’s Ministry of Commerce expressed readiness to negotiate trade terms, aligning with Trump’s conciliatory tone on Truth Social, where he reassured investors that both nations “want to help each other, not hurt.” Market analysts predict that this easing of tensions could provide a short-term confidence lift across global markets, potentially triggering a bounce-back in crypto prices after the weekend’s brutal sell-off.
A Pivotal Week Ahead for Crypto Confidence
With a record-breaking liquidation event, rising scrutiny over exchange transparency, a stalled regulatory environment and shifting global trade narratives, the crypto market faces one of its most pivotal weeks of the year. Whether the sector rebounds or continues to struggle will depend heavily on policy movement in Washington and continued clarity on data integrity from leading trading platforms.
