The aftermath of the October 10, 2025, flash crash continues to reverberate through the cryptocurrency market, sparking heated exchanges between influential figures in the industry. Star Xu, CEO of OKX, asserts that the repercussions of the crash were far more damaging and enduring than many realize. The severe liquidation event wiped out tens of billions in leveraged positions, with critics pointing fingers at Binance for alleged pricing issues and collateral depegging that exacerbated the crisis.
Xu has taken to social media to highlight what he perceives as the underlying failures of centralized exchanges, although he has not explicitly named Binance in his critiques. His statements have fueled discussions about accountability, market structure, and the protection of users amidst the growing tension between major exchanges.
In a recent post responding to comments made by Cathie Wood regarding the incident, Xu emphasized that the damage caused on October 10 was both “real and lasting.” He accused major exchanges of prioritizing short-term financial gains over the long-term health of the market, criticizing some of his competitors for promoting “Ponzi-like schemes” and a focus on marketing low-quality tokens instead of robust fundamentals. He expressed concern that, rather than embracing transparency in response to failures, some exchanges engage in “aggressive narrative control” to deflect criticism.
Wood’s analysis of the crash, shared in a Fox News interview, highlighted a software glitch at Binance as a key factor triggering a massive wave of forced liquidations, wiping out approximately $28 billion in the market. She suggested that the crash inflicted lasting damage, bringing the broader recovery to a slow crawl into early 2026. Although Xu did not contest Wood’s broader market assessment, he focused on the execution failures that left the industry grappling with lingering effects.
The October 10 event is now recognized as the largest liquidation event in crypto history, affecting over 1.6 million traders globally. It was initially triggered by a tariff threat from then-President Donald Trump, igniting a risk-off sentiment across global financial markets. With the crypto sector remaining heavily leveraged, the impact was severe: Bitcoin nosedived, altcoins suffered significant losses, and some tokens plummeted by as much as 80%.
However, what followed the initial sell-off proved to be even more controversial. Analysts reported that Binance’s systems may have worsened the situation, particularly as certain assets experienced severe price dislocations. For example, tokens like USDe traded as low as $0.65 on Binance, diverging sharply from their typical valuations around $1 on other exchanges. These anomalous prices impaired collateral valuations, triggering widespread liquidations that further dragged down the market.
In the days leading up to the crash, analysts noted unusual trading patterns, including significant inflows of stablecoins to Binance hot wallets and a lack of major market makers in the market’s most chaotic moments—raising alarm bells about liquidity issues at a tumultuous time. In response to the fallout, Binance expedited an oracle update and completed a compensation plan for affected users, amounting to an estimated $283 million.
Despite this, the estimates for total liquidations vary significantly, with some estimates nearing $19 billion and others suggesting losses close to $30 billion. Binance has defended its management during the crisis, attributing the fallout to broader market conditions and asserting that its core systems functioned as intended. Co-founder Yi He issued an apology for any disruptions due to increased trading activity and reiterated the exchange’s commitment to compensating users.
However, the incident has taken a toll on Binance’s reputation, reviving longstanding concerns about the practices of centralized exchanges, such as opaque risk controls and rapidly changing collateral rules that disproportionately affect retail traders during times of stress.
Xu’s remarks and the ongoing fallout signal a growing rivalry among cryptocurrency exchanges, where major players are increasingly competing not just on service quality but also on narratives surrounding accountability and market credibility. This confrontation within the industry is likely to persist long after the chaos of October 10.
