Binance is facing mounting pressure to disclose its full liquidation data, as the recent liquidation event saw losses of around $8B to $10B, nearly five times higher than the initial estimates. This follows an intense call from the crypto community for greater transparency regarding liquidation data from exchanges.

The Liquidation Crisis: What Happened?

The massive liquidation event occurred on February 3, 2025, causing a ripple effect across the crypto market. The initial estimates from Coinglass, a popular crypto derivatives data aggregator, placed the liquidation losses at about $2B. However, Bybit’s CEO, Ben Zhou, challenged this figure, claiming that the real total liquidation was significantly higher, closer to $8B-$10B.

Zhou explained that most exchanges, including Bybit, restrict full access to liquidation data for various reasons, including concerns about regulatory scrutiny. However, in the wake of the liquidation chaos and widespread backlash, Bybit has pledged to provide full access to its liquidation data, a move aimed at increasing transparency and protecting traders from future risks.

Zhou’s comments have prompted Coinglass to urge Binance, the world’s largest cryptocurrency exchange, to follow Bybit’s example and share its liquidation data. Binance had restricted access to this data back in mid-2021, citing concerns over attracting unwanted regulatory attention and the potential impact on its perpetual trading business.

The Importance of Transparency

Liquidations occur in the crypto market when a trader’s collateral falls below the required margin level, typically due to the volatility in asset prices. In traditional markets, traders are given a margin call to replenish their accounts, but in the crypto world, exchanges often trigger forced liquidations without prior notice, especially during sharp market declines.

The impact of such forced liquidations is far-reaching. Traders, especially those involved in leverage trading, are often left with massive losses, some even losing their entire positions. This has been evident in the aftermath of the February 3 event, with top traders in the crypto space admitting to being wiped out.

One such trader, Hanwe Chang, shared his devastating experience on social media, revealing that he lost everything during the liquidation cascade. Another user, Tyler Durden, pointed out that several eight-figure traders also faced liquidation during the same event, urging the community to be cautious and only risk small portions of their portfolio when engaging in margin trading.

Binance’s Response

While Bybit’s move to disclose liquidation data was praised, Binance has remained silent on whether it will follow suit. Richard Teng, the CEO of Binance, responded to the calls for transparency by stating that market volatility would reduce as the crypto market matures. However, this response has not calmed the growing demand from traders for more visibility into exchange activities, particularly liquidations.

In the crypto industry, exchanges play a crucial role in maintaining a balanced and fair trading environment. The lack of full disclosure about liquidation events can create an atmosphere of mistrust, leaving traders in the dark about the full extent of market risks.

Looking Ahead

As the crypto community continues to demand greater transparency, it remains to be seen whether Binance will take action similar to Bybit’s. With liquidity crises and liquidation cascades becoming increasingly common, the call for full access to liquidation data seems more urgent than ever.

The failure to provide transparency may damage exchanges’ reputations, particularly those as prominent as Binance. However, should Binance take the necessary steps toward greater openness, it could help restore trader confidence and reduce the risks posed by future liquidation events.