The post Early bitcoin investor Star Xu, founder of OKX, blames Binance for BTC’s October crash appeared on BitcoinEthereumNews.com.

Nearly four months after crypto’s record Oct. 10 flash crash wiped out leveraged positions across the market, the industry is still arguing about what actually broke. That argument turned into a public spat on Saturday after OKX founder and CEO Star Xu claimed the crash was neither complicated nor accidental, but the result of irresponsible yield campaigns that pushed traders into leverage loops they did not understand. On Oct. 10, President Trump’s fresh tariff escalation on China rattled macro markets and hit crypto at the worst moment. With leverage already stacked, the initial drop turned into a wipeout with roughly $19.16 billion in liquidations, including about $16 billion from long bets, as forced selling cascaded across venues. Star’s core point was about USDe, a yield-bearing token issued by Ethena. He described USDe as closer to a tokenized hedge fund strategy than a plain stablecoin. It is designed to generate yield through trading and hedging strategies, then pass that yield back to holders. “No complexity. No accident. 10/10 was caused by irresponsible marketing campaigns by certain companies. On October 10, tens of billions of dollars were liquidated. As CEO of OKX, we observed clearly that the crypto market’s microstructure fundamentally changed after that day. Many industry participants believe the damage was more severe than the FTX collapse. Since then, there has been extensive discussion about why it happened and how to prevent a recurrence. The root causes are not difficult to identify,” Xu said. Star argued that the risk began when traders were nudged into treating USDe like cash. In his telling, users were encouraged to swap stablecoins into USDe for attractive yields, then use USDe as collateral to borrow more stablecoins, convert those into USDe again, and repeat the cycle. The loop created a self-feeding leverage machine that made yields…

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Filed under: News - @ January 31, 2026 1:29 pm