A public dispute has emerged between the leadership of OKX and Binance over the origins of a historic market crash.
Star Xu, the founder of OKX, has claimed that a specific marketing campaign by Binance was the primary trigger for the massive deleveraging event on 10 Oct 2025. The crash, which saw Bitcoin prices tumble and wiped out billions in open interest, remains a point of contention for an industry still struggling to regain its 2025 records.
Leverage loops and stablecoin risks
In a detailed social media statement, Xu argued that integrating the Ethena USDe stablecoin into the Binance ecosystem created a "manufactured risk."
He alleged that a campaign offering a 12% yield encouraged users to engage in complex leverage loops. According to this theory, traders converted standard stablecoins into USDe to earn yield and then used that USDe as collateral to borrow more assets, effectively stacking risk during a period of relative calm.
Xu suggested that these loops generated artificial yields of up to 70%, obscuring the assets' underlying risk profile. When volatility finally hit the market on 10 Oct 2025, the USDe peg reportedly slipped on the Binance platform, triggering a chain reaction of liquidations.
The OKX chief noted that the damage was severe for global users and companies, including his own clients, and estimated that $20bn of value was erased in the ensuing chaos.
Counterclaims of macroeconomic shocks
Binance's leadership has dismissed these allegations, attributing the crash to external economic factors rather than internal product failures.
In a series of responses, Binance founder Changpeng Zhao and other industry figures argued that the market was already under significant pressure following US tariff announcements. They pointed out that the timing of the liquidations did not align with the USDe price movements, suggesting the depeg was a symptom rather than the cause of the broader sell-off.
Industry analysts have also questioned the single-actor theory. Some argue that Bitcoin had already bottomed out before the technical disruptions occurred on Binance. While the exchange acknowledged a brief slowdown in its internal asset transfer systems and compensated affected users with over $300mn, it maintains that the high level of leverage across the entire global market made a correction inevitable.
For institutional observers who follow the more disciplined approach of firms like Strategy, the row highlights the persistent lack of transparency in onchain market structures.
As Bitcoin remains below its peak, the focus has shifted to whether the sector can implement stronger risk frameworks to prevent a repeat of the $19bn wipeout. The debate highlights a growing rift between major exchanges over accountability and the long-term stability of digital dollar models.
