The paper trail instead reveals Binance pricing failures, on-chain ADL and a disclosure gap regulators have yet to close
Solana Research Institute, a Solana-aligned research group, used an Aug. 14 post to revive a July open letter by Angus Scott to the UK Financial Conduct Authority and other regulators. SRI reported roughly $18 billion in liquidations over 14 hours during the Oct. 10, 2025 crypto crash, including $3.21 billion in a single minute, and argued that opaque centralized venues failed while transparent on-chain finance kept functioning.
The crash records point to a more specific conclusion. Public data made it possible to reconstruct a large auto-deleveraging event on Hyperliquid, as well as deficits and oracle delays at Aave. ESMA later said Binance's internal collateral pricing amplified forced selling. Transparency exposed the mechanics of stress across market structures; it did not turn one venue category into a proxy for safety.
Auto-deleveraging, or ADL, is a last-resort derivatives mechanism that reduces profitable traders' positions when liquidations and risk buffers cannot keep a venue solvent. It differs from ordinary liquidation, which closes a losing position after its collateral falls below a required threshold. Regulators need comparable records to separate either mechanism from an outage, an oracle delay or a venue-local pricing failure.
Those numbers describe different scopes. A day-wide market estimate, a six-exchange 14-hour sample, a one-minute peak and a venue-specific loss mechanism answer different questions. Collapsing them into one total obscures the market plumbing that the policy debate is supposed to expose.
A Chaos Labs report on Aave said some markets experienced five-block price-update delays. Chaos Labs estimated that liquidation fees and SVR revenue left the protocol about $1.5 million net positive after the reported deficits.
Public records made parts of Hyperliquid's loss allocation and Aave's lending stress measurable. The same records documented ADL, oracle latency and bad debt. Observability gave outsiders a better audit trail, while the mechanisms themselves still imposed losses and operational risks.
Faster trade data still leaves the loss chain fragmented. Solana Research Institute says its 33-page letter followed discussions between the FCA and Solana Foundation, although the available material contains no independent FCA confirmation. The letter covers seven domains, including identity, resilience, custody, market abuse, systemic risk and prudential capital. The Oct. 10 crash is one case study inside that broader argument.
The FCA has already addressed part of the transparency problem. Its June 2026 final cryptoasset framework requires UK qualifying cryptoasset trading platforms and principal dealers to publish post-trade information as close to real time as possible and no later than one minute. Larger UK platform operators also face pre-trade transparency requirements.
The cited final framework does not expressly require standardized cross-venue reporting of liquidation volumes, ADL use or backstop losses. Faster trade data improves the view of execution, but the Oct. 10 records show how operational delays, pricing failures and loss-allocation mechanisms can remain hard to compare after a common shock.
Solana Research Institute's policy case is strongest when it focuses on that observability gap. The crash showed public records can make venue failures measurable, including failures on transparent platforms. Comparable event disclosures could help regulators distinguish routine solvency controls from venue-specific operational or pricing breakdowns without treating transparency itself as proof of safety.