OKX CEO Star Xu has publicly accused rival exchange Binance of being central to the October 10, 2025, cryptocurrency market crash, which he describes as a "man-made crisis" that wiped out tens of billions of dollars. Xu claims the damage exceeded the fallout from the FTX collapse in 2022.
In a detailed statement on social media platform X, Xu argued the sell-off was not a complex market event but the direct result of "irresponsible marketing campaigns" by Binance. The trigger, according to Xu, was Binance's temporary user-acquisition campaign offering up to 12% APY on Ethena's USDe synthetic dollar product, while allowing it to be used as collateral on par with established stablecoins like USDT and USDC with insufficient limits.
Xu emphasized that USDe is not a conventional stablecoin but a "tokenized hedge fund product" where user capital is deployed into arbitrage and algorithmic strategies. He argued this design embeds hedge-fund-level risk into an asset marketed as low-risk. The situation escalated as traders used USDe as collateral to borrow more USDT, convert it back into USDe, and repeat the cycle, creating a leverage feedback loop. This resulted in advertised APYs soaring to 24%, 36%, and even over 70%.
When market volatility surged, USDe rapidly depegged, triggering massive waves of liquidations totaling roughly $19 billion. Xu stated that weak risk management around other assets like WETH and BNSOL amplified the shock, causing some tokens to briefly trade near zero. Bitcoin itself experienced a 16.5% flash crash, falling from $121,000 to $101,000.
Binance and its co-founder Changpeng Zhao (CZ) have forcefully rejected Xu's narrative. In a January 31, 2026 AMA, CZ argued the sell-off was due to tariff-related macroeconomic news and thin liquidity, not Binance's actions. He stated that given Bitcoin's market scale, it would be extremely difficult for any single entity to influence prices by "dumping." Binance's internal review acknowledged technical irregularities on the day but denied they played a causal role. The exchange pointed to data showing Bitcoin bottomed between 21:20-21:21 UTC, while the USDe depeg occurred after 21:36 UTC, suggesting the crash was already underway.
Binance has distributed more than $328 million in compensation related to balance discrepancies and disruptions during the event. The public dispute highlights a deep industry divide over leverage, yield products, and exchange responsibility during market stress.
