Binance under pressure to disclose full liquidations data after recent $10B carnage 

• Recent crypto liquidations could have hit $8B-$10B, nearly 5x more than initially reported
• Bybit’s CEO has pledged to give full access to liquidation data for greater transparency

According to Ben Zhou, Co-founder and CEO of Bybit, the estimated market-wide liquidation on 3 February could be around $8B-$10B. This was 4-5x larger than the $2 billion initially reported by Coinglass, a crypto derivatives data aggregator. 

Zhou explained that most exchanges, including Bybit, limit liquidation data accessed by Coinglass.

However, he pledged to grant whole access following online outcry as several top traders went under after the recent liquidation cascade. He stated, 

“I am afraid that today’s real total liquidation is a lot more than $2B, by my estimation it should be at least around $8-10b. FYI, Bybit 24hr liquidation alone was $2.1B. Bybit will start to push all liquidation data. We believe in transparency.”

Crypto liquidations saga – Will Binance follow Bybit? 

In a rejoinder, Coinglass urged Binance, the world’s largest cryptocurrency exchange by trading volume, to disclose all its liquidation data.

According to the data aggregator, the exchange restricted liquidation data access in mid-2021, citing unwanted regulator attention and likely impact on its perpetual business. 

Source: X

For context, liquidations occur when traders’ collateral falls below the margin required in levered markets (using borrowed money from brokers). In most cases, especially in traditional markets, traders are notified of the liquidation risk through a margin call so they can fund the account accordingly.

However, given the volatile nature of crypto, exchanges trigger forced liquidations whenever they deem traders’ positions risky to stop further losses.  

Unfortunately, such forced liquidations have exposed traders to massive losses, with some losing everything during liquidation cascades. In fact, X user Hanwe Chang admitted his devastating story after losing everything on 3 February. 

Source: X

Another user and crypto investor, Tyler Durden, also acknowledged that he knew some of the top 8-figure traders who were liquidated after the recent episode.

Durden cautioned traders to only risk 1-2% in margin trading or avoid it all and bet in the spot markets. He said, 

“A few 8 figure traders blown up yesterday that I know of. 1-2% risk. Slow and steady wins the race. Or just stack sats and stay humble.”

Worth pointing out, however, that current Binance CEO Richard Teng didn’t directly respond to Coinglass’s request for complete access to liquidation data. Instead, the executive stated crypto market volatility will reduce as the market matures.