Months after a staggering $19 billion was liquidated in the cryptocurrency market, the digital asset landscape continues to grapple with the fallout. Star Xu, the CEO of the crypto exchange OKX, has now pointed fingers at Binance, claiming that the exchange played a crucial role in the catastrophic events of October 10.
In a recent statement on social media platform X, Xu made it clear that the situation was anything but accidental. He attributed the massive liquidations to “irresponsible marketing campaigns by certain companies,” with Binance, being the largest platform, having disproportionate influence and commensurate responsibility within the industry. He specifically called attention to Binance’s promotional launch of the USDe stablecoin, which offered a shocking 12% annual percentage rate (APR) during its promotional period. This risky offering, he argued, was akin to “hedge-fund-level risk.”
Following the announcement, markets were rattled further by tariff threats from then-President Donald Trump, triggering a widespread sell-off. Cryptocurrencies like Bitcoin, Ethereum, and Solana plummeted, often by double digits. Xu contended that many traders failed to grasp the risks of using USDe as collateral for further borrowing, which led them into a dangerous “leverage loop.” According to him, even a minor market disturbance was enough to cause a collapse, as volatility caused USDe to quickly lose its peg, culminating in the mass liquidation event.
“The damage to global users and companies — including OKX customers — was severe, and recovery will take time,” Xu remarked, reflecting on the aftermath of the crash. Notably, the meltdown was the largest in the history of cryptocurrencies, with some altcoins experiencing declines as steep as 80% within a single day. Bitcoin had reached a record high just before this downturn, only to lose those gains shortly thereafter. Currently, the flagship cryptocurrency is trading below the $100,000 threshold, recently priced at under $81,000, which is a significant 36% drop from its all-time peak.
In response to Xu’s allegations, Binance co-founder and ex-CEO Changpeng Zhao commented that he would refrain from elaborating on the matter but did retweet others who contested Xu’s claims. The aftermath of the crash also saw traders on Binance encountering pricing discrepancies and some assets losing their peg, prompting the exchange to roll out hundreds of millions of dollars in compensation for affected traders.
As the cryptocurrency market continues to navigate these turbulent waters, the resilience of both exchanges and their customers faces a prolonged test. The recovery process, according to industry experts, is expected to be arduous as volatility lingers and confidence remains shaken.
