OKX CEO Star Xu accused Binance of inciting the October 10 crisis that wiped out nearly $19 billion from the cryptocurrency market.
Xu claims that the confusion was caused by Binance’s aggressive marketing of Ethena’s USDe synthetic dollars.
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OKX CEO slams Binance’s ‘irresponsible’ USDe marketing
In a Jan. 31 post on Xu (formerly Twitter), Xu argued that the market crash was not a fluke of complexity, but a predictable risk management failure.
“It’s not complicated. It’s not an accident. 10/10 was caused by an irresponsible marketing campaign by certain companies,” he said.
Xu claimed that Binance’s user acquisition campaign targeting Ethena’s synthetic dollar USDe fostered excessive leverage. This, he argued, created a systemic vulnerability that could collapse under market stress.
According to the OKX CEO, Binance offered USDe an annual yield of 12%. This allows users to collateralize their assets on the same terms as traditional stablecoins such as USDT and USDC.
Xu claimed that this created a “leverage loop” where traders converted standard stablecoins into USDe to obtain farm yields. He claimed that this activity artificially inflated the token’s perceived APY rate as high as 70%.
“This campaign allowed users to leverage USDe as collateral with the same treatment as USDT and USDC with virtually no restrictions,” Xu wrote.
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Unlike traditional stablecoins backed by cash equivalents, USDe employs a delta-neutral hedging strategy, which Xu described as involving “hedge fund-level structural risk.”
Xu claims that this leverage loosened sharply when volatility occurred on October 10th. The resulting USDe depeg triggered a series of liquidations that the risk engine could not contain, particularly impacting assets such as WETH and BNSOL.
He said some tokens briefly traded at near-zero levels, and USDe’s “artificial” stability masked the buildup of systemic risk until it was too late.
“As the largest global platform, Binance has tremendous influence and corresponding responsibility as an industry leader. Long-term trust in cryptocurrencies cannot be built through short-term yield games, excessive leverage, or marketing practices that obscure risk,” Xu concluded.
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Binance and Etena refute OKX theory
However, key industry players forcefully rejected Mr. Xu’s story, citing transaction data that contradicted his timeline.
Haseeb Qureshi, Dragonfly’s managing partner, argued that Xu’s theory fails to explain the sequence of events. According to Qureshi, the price of Bitcoin hit bottom 30 minutes before USDe broke from its peg to Binance.
“It is clearly impossible that USDe caused the liquidation chain,” Qureshi said, calling the accusations a misplacement of cause and effect.
He further pointed out that USDe Depeg was an isolated event on Binance’s order book, whereas the liquidation spiral was market-wide.
“If the USDe ‘depeg’ did not propagate throughout the market, it would be inexplicable how a large-scale wipeout occurred on each exchange,” Qureshi added.
Ethena Labs founder Guy Young also disputed Xu’s claims. He cited order book data proving that the USDe price discrepancy occurred only after the overall market had already crashed.
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Binance, on the other hand, claimed that the issue was caused by a “liquidity vacuum” rather than its product.
The exchange released data showing that Bitcoin liquidity was at “zero or near zero” on most major exchanges during the crash. This thin market created a scenario where mechanical selling caused prices to fall disproportionately.
The exchange also denied systemic manipulation and attributed the chaotic price movements to market makers pulling inventory in response to extreme volatility and API latency.
Nevertheless, the standoff highlights an escalation in the blame game between top crypto exchanges, which face continued scrutiny over structural weaknesses exposed in the October 10 incident.
