OKX Founder Accuses Binance of Engineering October’s $19B Crash
Star Xu breaks the industry ceasefire, alleging Binance’s ‘irresponsible’ 12% USDe yield campaign created the leverage loop behind the October 10 liquidation event.
OKX founder Star Xu has shattered the industry’s uneasy truce regarding the October 10 market collapse, explicitly accusing rival Binance of manufacturing the systemic fragility that wiped out $19 billion in leverage. In a statement on X, Xu dismissed the prevailing narrative of a macroeconomic trigger, instead isolating a specific Binance yield campaign involving Ethena’s USDe as the "primary detonator."
The "Marketing" Vector
Xu’s allegations center on a Binance promotional structure that offered 12% APY on USDe while allowing the token to be used as collateral for margin trading. According to Xu, this created a "leverage loop" where traders cycled USDe to farm yields, unaware that the underlying asset, which Xu described not as a stablecoin but as a "tokenized hedge fund", relied on the very perpetual markets they were leveraging.
"No complexity. No accident. 10/10 was caused by irresponsible marketing campaigns by certain companies. What we choose to normalize today will determine whether this industry earns lasting trust.", Star Xu
The accusation challenges the official post-mortem from Binance, which attributed the volatility to a "macro shock" following news of potential 100% tariffs on Chinese imports. While Binance has deployed a reported $283 million to $600 million in compensation to affected users, the exchange maintains its systems functioned as intended during the liquidity vacuum.
Counter-Narrative: The Macro Defense
Market makers and institutional voices have pushed back on Xu’s "single culprit" theory. Haseeb Qureshi, Managing Partner at Dragonfly, argued that Bitcoin bottomed out before USDe depegged on Binance, suggesting the stablecoin’s failure was a symptom, not the cause. "It was like a fire broke out… but the firefighters couldn’t reach it," Qureshi noted, pointing to broader liquidity failures rather than a specific marketing ploy.
Market Reaction
The renewed friction between the two largest offshore exchanges has done little to settle nerves. Bitcoin struggled to hold $83,000 (-5.75%) today as traders parsed the governance implications. If Xu’s characterization of USDe as a "complex financial instrument" gains regulatory traction, it could force a re-pricing of risk across all yield-bearing stablecoins.
