OKX CEO Criticizes Binance Over October 10 Market Crash – Details

OKX CEO Star Xu has publicly accused Binance of being central to the October 10 crypto market crash that worn out tens of billions of {dollars}, inflicting injury that many described exceeded the fallout from the FTX collapse in 2022.

Star Xu: Binance USDe Marketing Responsible For October 10 Crash

In a detailed statement on X, Star Xu stated the October 10 sell-off was not a fancy or mysterious market occasion, however the direct results of “irresponsible advertising and marketing campaigns,” which now seems to have basically altered crypto market microstructure. On this explicit day, Bitcoin skilled a 16.5% flash crash, falling from $121,000 to $101,000.

According to Xu, the set off for such a damaging occasion was Binance’s non permanent user-acquisition marketing campaign providing as much as 12% APY on USDe, whereas permitting the asset for use as collateral on the identical footing as USDT and USDC, with inadequate limits. Xu defined that USDe just isn’t a standard stablecoin however moderately a “tokenized hedge fund product,” issued by Ethena, the place person capital is deployed into index arbitrage and algorithmic buying and selling methods earlier than being tokenized. He argued that this design embeds hedge-fund-level danger into an asset that was introduced to customers as functionally equal to low-risk stablecoins.

Notably, customers have been inspired to transform USDT and USDC into USDe for yield. But market danger escalated when merchants began utilizing this USDe as collateral to borrow extra USDT to transform it once more into USDe, and repeat the cycle. This leverage loop resulted in outrageous APYs of 24%, 36%, and even over 70%, which many customers perceived as low danger just because they have been provided on a significant change reminiscent of Binance. However, a surge in market volatility would trigger the USDe to depeg quickly, triggering large waves of liquidations. Xu stated weak danger administration round property like WETH and BNSOL amplified the shock, leading to some tokens briefly buying and selling close to zero.

While insisting he was not assigning blame, Xu emphasised the necessity for business leaders reminiscent of Binance to prioritize transparency, stronger danger controls, and accountable innovation, warning that short-term yield video games undermine long-term belief.

CZ Fires Back

Notably, Binance co-founder and former CEO Changpeng Zhao (CZ) has pushed again on Xu’s narrative. Speaking in a Binance Square AMA on January 31, 2026, CZ said the October 10 sell-off was as a consequence of tariff-related macroeconomic information, to not Binance system failures or deliberate actions.

CZ argued that given Bitcoin’s sheer market scale and liquidity, it will be extraordinarily tough for any single entity to affect costs just by “dumping.” Binance’s inside post-incident assessment did reveal technical irregularities that occurred on the day, together with non permanent switch or UI show points and deviations in sure indices, however CZ denied that these performed a causal function within the crash.

Managing Partner at (*10*), Haseeb, additionally countered Star Xu’s accusations, stating that the timing of the USDe depegging, which occurred after Bitcoin already bottomed, in addition to the isolation of this occasion on the Binance change, provided a powerful opposition to such claims.